Under the Term Sheet (TS) executed, the producer will acquire an option to receive up to an initial 75% interest in the expanded project
Canada-based energy company Sparton Resources has announced that it is in advanced negotiations with an unnamed producer for a partner in the Bruell gold project in Vauquelin township, Quebec.
Under the term sheet (TS) executed by Sparton Resources, the international mid-tier gold and base metals producer will acquire an option to receive up to an initial 75% interest in the expanded project.
Terms of the agreement between Sparton Resources and the Producer
Sparton Resources said that the non-binding TS considers the implementation of a definitive option agreement between Sparton and the producer by which the latter will make all future cash payments and fund all the future expenditure requirements under the existing property option agreement between Sparton Resources and the original optionor .
The producer will also pay the company a cash amount as partial compensation for past expenditures funded by the company under the underlying option agreement.
Sparton Resources added that the producer will have the option to grant Sparton a 25% participating interest in a new joint venture for further development of the property if the producer fulfills the above-said condition.
Additionally, if the producer elects to purchase Sparton’s 25% interest in the property, then upon a decision to place any mining project on the Property into commercial production, the company will be granted a 2% net smelter return production royalty (“NSR”) in respect of the Property.
Sparton Resources CEO Lee Barker said: “We are very pleased to have attracted the interest of a significant gold producer in the Val D’Or Area for the Bruell Project.
“Recognition of Sparton’s accomplishments in identifying new mineralization at Bruell and of its exploration potential is very rewarding to the Company, its management and consultants.”
The closing of the deal is subject to required corporate and regulatory approvals.
In October, Sparton Resources that it had expanded the size of the property, by nearly 30%.