Miramar Mining (MAE-T) and Hope Bay Gold (HGC-T) have agreed to sell to Sherwood Petroleum (SWD-V) 11 crown mineral claims on the Elu greenstone belt in Nunavut Territory.
The property lies about 30 km northeast of the 80-km-long Hope Bay greenstone belt, where Miramar and Hope Bay are partnered on the Hope Bay gold project.
Sherwood can acquire all of the two companies’ rights in the property by issuing the partners 5 million units each. Each unit, priced at 25, will consist of one Sherwood common share and one share-purchase warrant. Each warrant will allow the holder to buy one additional share at 40 for two years.
Sherwood gets the right to acquire any mineral claims staked within 7 km to the east and west of the Elu property and within 20 km to the north or south. The company, however, is not allowed to acquire any properties within 10 km of the existing Hope Bay properties.
As a condition of closing, Sherwood must raise $800,000, primarily for general corporate purposes and to fund work at Elu. The company plans a brokered private placement of a minimum of 3.2 million units at 25 apiece.
The deal is subject to shareholder and regulatory approval and is expected to close this summer.
“Once finalized, this agreement will result in each of Miramar and Hope Bay Gold holding 27% of the issued and outstanding shares of Sherwood," says Tony Walsh, Miramar’s president and CEO. "This provides Miramar and Hope Bay Gold with the opportunity for a separate company to focus entirely on the potential of the Elu belt. The agreement will allow Miramar and Hope Bay Gold to benefit from any potential discoveries on the Elu belt without diverting energies and financial resources from exploration at Hope Bay.”
Miramar and Hope Bay say Elu’s geologic setting is analogous to that of the Hope Bay belt and the two belts may be geologically related. Reconnaissance exploration on Elu in 2000 turned up several targets prospective for the discovery of gold mineralization.
Recent drilling by Miramar and Hope Bay on the Hope Bay project has targeted the recently discovered Naartok deposit. The discovery hole there cut a 24-ft. true width averaging 0.85 oz. gold per ton. More recent delineation drilling on the zone continues to show impressive grades.
At the Hope Bay project, the partners have so far outlined 1.3 million oz. gold in near-surface, high-grade, measured and indicated resources at the Boston and Doris deposits, plus a further 579,000 oz. in the inferred category at Doris. The Boston and Madrid deposits also host additional lower-grade resources.
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