Montreal-based KWG Resources (KWG-T) can earn up to an 80% interest in seven gold properties held by Buccaneer Mining in the Magadan region of Far Eastern Russia.
The agreement also covers three Russian properties with potential gold and platinum group metal mineralization.
KWG secured the option agreement by paying Buccaneer US$75,000, to be followed by due diligence and additional payments of US$175,000 cash and US$2.5 million in KWG stock.
The due diligence is being carried out by KWG’s in-house Russian engineering staff, who are based in the Magadan area.
Meanwhile, KWG has, in effect, taken over Far East Gold (FEGI-C). Both companies are subsidiaries of Montreal-based St. Genevieve Resources (SGV-T).
KWG now holds 96.2% of the issued and outstanding common shares of Far East Gold.
KWG exchanged one of its shares and a third of a KWG share purchase warrant for every 2.7 shares of Far East Gold. KWG says it is considering acquiring the remaining 3.8% of Far East’s shares.
Far East is developing the Ametistovoe gold deposit on the Kamchatka Peninsula, some 1,000 km east of the Magadan property.
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