Junior gold miner Northfield Minerals (TSE) has signed a letter of intent to acquire an 80% interest in Pangold S.A., a privately owned Panamanian gold company. The interest will be acquired in exchange for 5.2 million Northfield shares.
Pangold holds an 86% interest in the producing Remance mine, about 100 miles west of Panama City. The 11-sq.-mile property is only 6 miles east of Greenstone Resources'(TSE) Santa Rosa open-pit, heap-leach deposit, and is also close to the prolific 1.5-billion-ton Cerro Colorado copper-gold project. Pangold is also pursuing gold projects in Peru.
The Remance property contains an extensive epithermal alteration system in andesitic flows and pyroclastic rocks of miocene age. The alteration zone covers an area measuring 1.9 miles by 0.6 miles and is similar to that exposed at the Santa Rosa deposit.
The principal vein at Remance, which is being mined from underground, extends for a strike length of 1.7 miles across the alteration system.
Having been in operation since 1990, the mine is now producing 250 tons per day, with a recovered grade of 0.19 oz. gold per ton. Minable reserves stand at 500,000 tons grading 0.2 oz.
Subsequent to closing the deal, Northfield will issue an additional 1.5 million shares (maximum), based on an independent evaluation of Pangold’s Peruvian gold projects. Northfield will also have a 12-month option to acquire the remaining 20% interest in Pangold in exchange for a further 1.4 million Northfield shares.
Northfield intends to explore for a large-tonnage, epithermal gold deposit on the property. In addition, the underground operations will be upgraded to improve operational efficiency, expand production and outline additional reserves. Drilling is to begin shortly.
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