Blackrock Gold Corp (CVE:BRC) (OTCPINK:BKRFF) has completed its lease option agreement for the Tonopah West project, the company said Thursday.
The agreement with Ely Gold Royalties Inc gives Blackrock a four-year purchase option for the project, which lies in the historic Tonopah silver district.
Vancouver-based Blackrock now has control over the largest claim package in the area and a major foothold in the Tonopah district, which has produced over 174 million ounces of silver and 1.8 million ounces of gold.
Tonopah West consists of 98 patented and 17 unpatented lode mining claims covering around 4.5 square kilometres or 1,100 acres of land.
“We are excited to move forward on the property in one of the largest and highest grade past-producing silver districts in North America,” Blackrock CEO Andrew Pollard told shareholders in a statement.
The brownfield property adds a “new dynamic” to Blackrock, giving it compelling and well-defined targets, according to Pollard.
“In the closing of this multi-property agreement, we have consolidated this district-leading claim package together for the first time since Howard Hughes held them back in the 1960s,” Pollard said.
The four-year lease option agreement sees Blackrock paying Ely US$325,000 in cash upon closing, followed by escalating cash payments for the duration of the four-year period in a total deal worth US$3 million.
Blackrock plans to target four areas on the property where historic data points to a possible 2.5 million- to 6.5 million-ton deposit with grades ranging from 13 to 21 grams per ton gold and gold equivalent.
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