Medgold has secured an option to acquire Fortuna’s 51% stake in the project for a cash consideration of $3.468m
Canadian exploration company, Medgold Resources has signed a non-binding letter of intent (LoI) with Fortuna Silver Mines to consolidate ownership of the Tlamino project in Serbia.
As per the terms of the LoI, Medgold has secured an option to acquire Fortuna’s 51% stake in the project for a cash consideration of $3.468m.
Covers an area of approximately 200km2 in southern Serbia, the project is held by Medgold under two exploration licenses.
Medgold Resources said: “The Option is valid for three years and is exercisable upon the earlier of (i) the expiry of the term of the Option, (ii) the date of completion of a sale by Medgold of a 100% interest in the Project to a third party, or (iii) the date of completion of a merger between Medgold and a third party.
“Fortuna will also be entitled to deferred monthly option fees (the “Monthly Fees”) of US$23,000 per month commencing from the date of the Definitive Agreement (as defined below) to the date of exercise of the Option, payable upon exercise of the Option.
“In the event that the Option is exercised within 12 months of the date of the Definitive Agreement (as defined below), the Monthly Fees will be fixed at US$276,000.”
Medgold’s option is subject to the execution of a definitive agreement
In 2018 and 2019, Medgold conducted mapping, surface sampling and geophysics (IP) followed by diamond drilling at the Barje Prospect, where outcropping mineralisation was first observed in the 1950s and 1960s.
Funded by Fortuna, the activities resulted in intersected gold mineralisation in a shallowly inclined body of hydrothermal breccia below altered schist.
The firm said that the option is subject to the execution of a definitive agreement between Medgold and Fortuna within 60 days’ time of the effective date of the Letter.
Additionally, the option is also subject to the approval from the TSX Venture Exchange, and the boards of directors of both companies.