Kirkland will have an option to earn approximately 75% stake in the property by spending nearly $26.6m
Canadian exploration-development company Wallbridge Mining Company has signed a non-binding term sheet with Kirkland Lake Gold to form a joint venture for the Detour East gold property.
Under the terms of joint venture agreement, Kirkland will have an opportunity to earn approximately 75% stake in the property by spending nearly CAD35m ($26.6m).
The Detour East project is part of the 739km2 Detour Fenelon Gold Trend land package that was purchased with the acquisition of Balmoral Resources.
Wallbridge president and CEO Marz Kord said: “This Term Sheet, and ultimate joint venture agreement, is strategic for Wallbridge as it allows the Company to focus on fully-defining the size potential of our 100% owned Fenelon Gold property (Fenelon) while at the same time advancing exploration on Detour East located at the far west end of the very large land position Wallbridge acquired through its acquisition of Balmoral Resources Ltd. (Balmoral).”
Kirkland will right to purchase further 25% stake in Detour East property upon formation of joint venture
As per the terms of the term sheet, Kirkland will be given an option to purchase an undivided 50% stake in the Detour East property by providing a funding of CAD7.5m ($5.7m) for phase 1 of the project for over five years.
The option includes a CAD2m ($1.5m) minimum commitment in the first two years that include CAD0.5m ($0.3m) by the first anniversary and CAD1.5m ($1.1m) by the second anniversary of entering into a definitive joint venture agreement.
During these two years, Kirkland will have the right to act as the operator for the Detour East property.
The two companies will form the joint venture on the property and Kirkland will become its operator after satisfying the two year period option.
After the formation of the joint venture, Kirkland will have the right to purchase further 25% stake in the property by providing CAD27.5m ($20.9m) of additional expenditures within the first five years of the formation of the joint venture.
In November last year, Kirkland announced the acquisition of Canadian gold miner Detour Gold in an all-stock deal worth around CAD4.9bn ($3.68bn).