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.
“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.