Calgary-based Thor Gold (ASE) has signed a letter of intent to earn a 70% interest in Golden Zone Developments’ (VSE) Big Hurrah project on the Seward Peninsula about 45 miles east of Nome, Alaska.
The property hosts reserves of 380,000 tons grading 0.45 oz gold per ton.
Under the terms of the letter, Thor can earn its interest at Big Hurrah by spending $3.5 million(US) over three years in instalments of at least $500,000 in year one and $1.5 million during the second year of the option.
The agreement is contingent on Dallas Mines reducing its net smelter return on the 242-acre property, which consists of 15 patented claims, to 3% or less.
Thor and Golden Zone said they plan to form a management committee to operate the project with Thor in control from year two onwards. Any additional financing needed at Big Hurrah will be provided by the companies in proportion to their respective interests.
Golden Zone has also signed a letter of intent to acquire Cook Inlet Region’s interest in the Big Hurrah for $350,000 plus $200,000 once production reaches 35,000 oz.
If the price of gold falls below $375(US) per oz, Thor’s obligations under the option agreement would be suspended, only to resume after the price of gold rises above $400 per oz for three consecutive months.
In other news, Thor Gold is planning to execute a private placement of flow-through shares at 50 cents per share to raise $262,500.
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