Contact Gold (TSXV: C) announced that it signed a purchase option agreement with Ely Gold Royalties (CVE: ELY) to acquire an undivided 100% interest in the past-producing Green Springs gold project, located in White Pine County, Nevada.
In a press release, Contact said that this acquisition adds a second Carlin-type gold system to the property portfolio.
Green Springs is approximately 10 km east of Fiore Gold’s Gold Rock project, 10 km south of Waterton’s Mt. Hamilton gold deposit and 20 km southeast of Fiore Gold’s producing Pan Mine.
“We are thrilled to add the Green Springs gold project as a complement to our flagship Pony Creek project,” Matt Lennox-King, President and CEO of Contact Gold said in the media brief. “The acquisition of a 100% interest in a high-quality, past-producing Carlin system with a wealth of compelling historical gold intercepts, represents a clear opportunity to create value.”
Green Springs is located at the southern end of Nevada’s prolific Carlin Trend, 60 kilometres southwest of the historic mining centre of Ely, in a region hosting numerous producing and past-producing Carlin-type gold deposits.
The project hosts a heap-leach gold mine that, in the late 1980s, produced 72,000 ounces of gold from a series of shallow pits, less than 100 metres deep, at an average grade of 2.32 g/t Au.
The agreement to acquire the property led Contact and its U.S. operating entity, Clover Nevada II LLC, to issue to Ely Gold’s subsidiaries 2,000,000 common shares of Contact Gold, pay $25,000, and the reimburse prepaid claims fees relating to Green Springs.
Contact also has to make three payments of $50,000 every year up till the third anniversary of the purchase option agreement, and a $100,000 payment on the fourth anniversary.