Glimmer Resources (gme:vse) has signed a letter of agreement with Canamax Resources to explore its 132-claim property in Barnet Twp., Kirkland Lake mining district, Ontario.
The company’s new gold find in surface outcrops is the main target to be tested by Canamax. Glimmer, at the same time, will follow up other targets on the property, carry out systematic and detailed exploration and will conduct a reverse circulation drilling program.
Canamax has agreed to pay Glimmer $250,000 and provide an additional $150,000 to Glimmer for exploration. Canamax itself is to spend an additional $300,000 on the property. The $700,000 will be spent over an 8-month period.
If Canamax elects to continue exploration it must spend an additional $700,000 under identical terms including a further $250,000 cash payment to Glimmer over the following 8-month period to earn a 50% interest in the property. Canamax will have the right to earn an additional 10% interest by spending an additional $1.5 million on exploration over the next 24 months.
Once Canamax has expended $2.9 million on this project, it will have earned a vested 60% interest and the parties will contribute on a 60:40 pro rata basis. Canamax will then be obligated to pay Glimmer $50,000 per annum as long as it holds any continuing interest in the property. At this juncture either party may dilute to a minimum 20% interest. Such party may then revert to a 15% net profit or to a 3% net smelter return.
Considerable interest has been generated amongst the major company mining fraternity in response to the discovery announcement and as a result of the many property examinations they conducted before the snow fell in December. The find is strategically located in the Abitibi greenstone belt along the same general trend as the producing Ross mine to the west and the American Barrick and developing Canamax properties to the east.
Glimmer is currently researching potential heap leaching properties as well as other primary precious metal properties of interest.
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