MGX Minerals Inc (CSE:XMG) (OTCPINK:MGXMF) is getting into the gold space with the acquisition of a past-producing project in British Columbia.
The company announced Thursday that it has acquired the Heino-Money gold deposit and the Tillicum Claims in the West Kootenay region of the province in a C$5 million cash-and-share deal.
Heino-Money was active between 1981 and 1993 and produced around 5,800 tons of gold and silver ore. In its last year of operation, 5,503 tons of mineralization with an estimated head grade of 24.4 grams per ton gold was shipped to a mill for processing, and approximately 102,443 grams of gold and 149,546 grams of silver were recovered into concentrates that were shipped to Japan for smelting.
The Tillicum Claims consist of the Grizzley, Annie Flats, and Silver Queen occurrences, located approximately 110 kilometres east of the town of Kelowna. Early exploration work during the 1980s at Silver Queen returned promising results. Diamond drilling in 1983 intersected values ranging from 40.1 grams per ton silver over 3.65 metres to 144.7 grams per ton over 4.51 metres.
Under the terms of the acquisition, MGX has agreed to pay the unnamed vendors 1240056 BC Ltd and Gustafson Holdings cash payments totalling C$2 million for 90% ownership on a staggered payment schedule until 2024. MGX also issued 20 million shares to the vendors priced at C$0.10 per share on the same payment schedule. The remaining 10% interest may be purchased for C$1 million at any time.
MGX also granted the vendors a net smelter return (NSR) of 5%, which can be bought back for C$1 million. The company also agreed to spend C$1.05 million in exploration, $50,000 of which will be spent prior to August 1, 2020.
The Vancouver-based firm plans to complete an NI 43-101 technical report within 45 days.
--Updated with additional information--
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