South-Malartic Exploration (MSU-V), its hands full with its Mexican projects, has dealt a right to a 50% interest in the Croinor gold project in northwestern Quebec to First Gold Exploration (EFG-V, FGOC-O).
There are two agreements governing the earn-in, one on the Croinor lease and adjacent claims, the other on a surrounding land package. To earn in on the immediate project area, First Gold issues 5 million shares, or 700,000 shares and $5 million cash, to South Malartic and must do $1.4 million in exploration work by the end of January 2009. An initial work commitment of $650,000, to include at least 5,000 metres of drilling, must be fulfilled by the end of 2007.
Under the second agreement, First Gold can earn a 30% interest in the surrounding property by issuing 250,000 shares and performing $500,000 in work by the end of 2008, including a 1,500-metre drill program on the Bug Lake prospect, near Croinor, in 2007. First Gold can then increase its interest to 50% by issuing 200,000 more shares and doing $500,000 more in exploration work by the end of 2009.
The most recent resource estimate on Croinor, from 2005, puts the size of the deposit at 620,000 tonnes grading 10.37 grams gold per tonne.
First Gold will need regulatory permission for the share issue.
South Malartic is to change its corporate name to X-Ore Resources, following a shareholder vote. Its new ticker will be XOR.
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