Drilling operations on Allegiant Gold’s Eastside gold property near Tonopah, Nevada. Source: Allegiant Gold Ltd.
Allegiant Gold Ltd. [AUAU-TSXV; AUXXF-OTCQX] said Tuesday January 22 that it has optioned out three U.S. projects in a move to cut costs and allow the company to focus on six projects that are slated for near-term drilling.
“With our focus in the foreseeable future clearly dedicated to our high-impact, six-project discovery drilling campaign, optioning out certain projects will ensure that they are advanced with exploration spending,” said Allegiant Chairman and CEO Robert Giustra.
“In addition, Allegiant’s annual property holding costs may be reduced by up to US$600,000 during the option periods and the deals could generate up to approximately US$3 million in option payments to Allegiant,” Giustra said.
Allegiant shares advanced on the news, rising 5% or $0.01 to 21 cents. The shares trade in a 52-week range of 21 cents and 75 cents.
Allegiant was spun out last year to contain what were previously the Western U.S. exploration assets of Columbus Gold Corp. [CGT-TSX, CBGDF-OTCQX].
Allegiant owns 14 drill-ready projects in the Western U.S., including 11 in Nevada. All were handpicked by Andy Wallace, a successful and highly experienced geologist. His track record of success includes multi-million ounce gold discoveries including the Marigold, Pinson and Dee mines in Nevada.
Working through his private company Cordex Exploration LLC, Wallace has assembled a portfolio of projects headed by the 100%-owned Eastside property in Nevada, which hosts an inferred gold resource of 721,000 ounces of gold. Preliminary metallurgical testing indicates that both oxide and sulphide gold mineralization at Eastside is amenable to heap leaching.
Under agreements announced Tuesday, Allegiant has granted privately-owed gold exploration company Barrian Mining Corp. an option to acquire a 75% interest in the Bolo gold project in Nevada. Under the deal, Barrian can earn an initial 50.01% by issuing US$1.0 million worth of shares to Allegiant over three years. It must also spend US$4.0 million on exploration by the end of 2022.
Barrian can earn an additional 24.99% by spending an additional US$4 million within two years of earning the first 50.01%. However, if it elects not to, control would end up back with Allegiant.
Barrian, which is gearing up to go public, has also been granted the option to earn a 100% stake in the Mogollon gold project in New Mexico. It can earn the interest by issuing US$1 million worth of shares to Allegiant over three years.
In April 2018, Allegiant granted Barksdale Capital the option to acquire a 100% interest in the Four Metals project in Arizona. To earn the interest Barksdale much make cash and share payments totalling US$450,000 to Allegiant and its partner MinQuest Ltd. over a five-year period.