Queenston grabs Newmont’s half of Kirkland Lake JV

Queenston Mining (QMI-T) has inked a deal to acquire Newmont Mining‘s (NEM-N) half-interest in the Kirkland Lake joint venture for just less than $3.9 million in cash and shares.

The purchase price will comprise a $3 million cash payment plus $868,500 worth of Queenston shares. Newmont will retain a sliding scale net smelter return royalty on the property. The royalty increases to 2% at gold prices over US$400 per oz. from 1% at gold prices below or equal to US$350 per oz.

To fund the acquisition, the company plans a $4 million private placement of share units and flow-through shares.

In the end, Queenston will own a 100% interest in 713 mineral claims covering 116 sq. km. The property contains five gold deposits with measured and indicated resources of 4.1 million tonnes running 5.6 grams gold per tonne plus inferred resources of 4.5 million tonnes averaging 5.3 grams gold. The property also includes an office-warehouse and a former mill-tailings complex.

The deal will see Queenston’s total gold resources will increase by 70% to 1.8 million oz.

With about $11 million in working capital, Queenston has planned a 22-hole diamond drill program to target the Anoki Deep, 180 Splay, Esker, Gull Lake, Amalgamated Kirkland and Vigrass Lake areas.

Newmont inherited its stake in the project earlier this year via its acquisition of Franco-Nevada Mining, part of a three way deal also involving Australia’s Normandy Mining.