Vancouver – China-focused junior explorer Maxy Gold (MXD-V) is offloading its Niukong gold project, part of the Luchun joint venture in southern Yunnan Province, to a private Hong Kong-based mining group.
The agreement will see Federal International Mining Group purchase Niukong for $7.3 million, following the transfer of the project into the Chinese cooperative joint venture group Yunnan Si Mai Mining. Federal will acquire Yunnan Si Mai, which itself will divest of all other projects interests in the Luchun JV (specifically Niubu-Dichu and Niujaozhai) to only hold Niukong. Yunnan Si Mai is held 85% by Maxy Gold and 15% by partner Yunnan Yuxi Maite Industry.
Maxy Gold president and CEO Andre Gauthier commented, “We are proud to be one of the first foreign groups to sell a property interest to a Chinese controlled group.”
The deal gives Maxy Gold a significant cash infusion (about $6.2 million) to fund ongoing drill programs on its Luchun JV where the company is boosting its interest to the 90% level.
Recent drilling on the Dichu prospect, about 35 km south of Niukong, returned intersections of up to 8.4 metres of 2.7 grams gold per tonne. The JV is also conducting underground exploration in workings that also deliver some small scale production.
Skarn gold mineralization at Niubu-Dichu is hosted in carbonaceous sediments within a sequence of siliciclastics and is associated with an intrusive diorite.
Shares of Maxy Gold have recently risen to a two-year high of $1.90 apiece, giving the company a $57 million market capitalization based on its 30 million shares outstanding.
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