Northern Vertex has the right to earn an undivided 70% interest in the Moss Mine gold/silver property, subject to the terms of the exploration and option agreement.
Patriot was paid $500,000 upon execution of the agreement and Northern Vertex must spend an aggregate total of $8m on exploration and related expenditures over the next five years.
Subsequent to exercise of the earn-in, Northern Vertex and Patriot will form a 70/30 joint venture and financing of future work on the property will be on a proportional basis.
Either party may be diluted if it does not contribute to the planned programs, and if either party is diluted below 10%, its interest will convert to a 3% net smelter return (NSR) royalty, and an existing 3-3.5% NSR exists on the Moss Mine property.
Patriot said it has been advancing its 100% owned Moss Mine project for the past seven years.
The company acquired the surface and mineral rights to the property, comprising of 104 unpatented claims and 15 patented claims for over 2200 acres, in a series of transactions from 2004 through 2009.
About 305 drill holes have been drilled in the property for a total of 54,390ft and the results of this and previous work show typical grades of 0.015 oz/ton to 0.088 oz/ton gold equivalent, and the gold equivalents use a 1:60 gold:silver ratio.
Mineralization is contained within a steep to moderate dipping vein and vein stockwork system in true widths up to 45ft.
Drilling has defined mineralization along a strike of 5,000ft and an average depth of near 200ft (limited drilling has traced mineralization to 800ft), and mineralization is open to depth and along strike.
Patriot believes the Moss Mine project has the potential for an economic resource of leachable gold and silver in the order of one million ounces of gold equivalent.
A drilling campaign consisting of approximately 55 drill holes has been tentatively scheduled to occur over the next several months, the company said.
Simultaneously, Northern Vertex will conduct hydrology, geophysical and environmental studies, and initiate permitting work, all aimed to advance a production decision.
