UrbanGold Minerals Inc. [UGM-TSXV] and Argonaut Gold Inc. [AR-TSX; ARNGF-OTC] have entered into a formal joint venture for the Bullseye property located approximately 17 km south of the former-producing Troilus gold-copper mine and 100 km north of Chibougamau, Quebec.
On September 13, 2019, UrbanGold had announced the signing of an option agreement to earn a 50% interest in Argonaut’s claims, by financing a $500,000 exploration program and issuing 750,000 shares to Argonaut. UrbanGold has now completed its earn-in and, as part of the agreement, Argonaut and UrbanGold are combining their respective claims in the immediate area into a single 8,642-hectare property to form the Bullseye property. Each party will hold a 50% stake in the property. UrbanGold is to remain the operator for the time being.
Two drill programs totaling 2,373 metres were completed in 2019 which delineated gold mineralization over significant widths on the Cressida block which is on strike and in the same geology as the past producing Troilus mine. The Joint Venture now establishes an exploration committee which will review the next steps, including a second phase of drilling on the Cressida Zone.
Mathieu Stephens, UrbanGold President and CEO, said: “We are pleased that UrbanGold has been able to enter into this Joint Venture ahead of schedule and at a time when markets seem to point at a bullish gold sector. We look forward to continue work with Argonaut in the area where we have encountered significant gold mineralization over the next few months. Given its potential for gold mineralization, the Troilus area continues to be our main focus.”
Brian Arkell, Vice-President of Exploration for Argonaut Gold, commented: “As part of our diversification strategy, we are pleased to have UrbanGold partner with us as we renew our exploration in Quebec. We recognized the Troilus area as having excellent exploration potential and the team has identified several targets near existing infrastructure which we look to forward to further investigating.”
The property is located in the Troilus area, near the past producing open-pit Troilus mine (2 million ounces of gold produced (source: Troilus Gold website)). Key infrastructure remains at the site, including a power line, a 50MW substation, camp, water treatment facility and permitted tailings facilities. It is to be noted that UrbanGold also holds several blocks of 100%-owned claims in the area which are not part of the Argonaut agreement. Work is currently under way on these claims.
In a separate development, Argonaut Gold and Alio Gold Inc. [ALO-TSX, NYSE American] have received the clearance decision from the Mexican Comision Federal de Competencia Economica (COFECE) with respect to the pending merger between the companies. COFECE approval was the final government agency approval required before completing the merger, which is anticipated to occur between June 29, 2020, and July 3, 2020.
Argonaut Gold is a Canadian gold company engaged in exploration, mine development and production. Its primary assets are the El Castillo mine and San Agustin mine, which together form the El Castillo Complex in Durango, Mexico and the La Colorada mine in Sonora, Mexico.
In mid-morning trading shares of Argonaut Gold gained $0.08, or 3.3%, to $2.52 on a volume of 6,053,000 shares traded. UrbanGold shares was unchanged at $0.155.