Pacton Gold Inc (CVE:PAC) (OTCPINK:PACXF) is selling certain projects in its Australia portfolio but retaining the key Egina asset, it said Tuesday, as the firm revealed it was selling 75% of the Arrow, Yandicoogina and Boodalyerrie gold properties in the Pilbara.
It has struck a binding letter of intent (LOI) with Pilbara Gold Corp Ltd (PGC), which in turn is being bought by Aussie-listed Raiden Resources Limited (ASX:RDN)
The latter is a gold-copper focused explorer focused on the emerging Tethyan metallogenic belt in Eastern Europe and has established a significant exploration footprint in Serbia and Bulgaria, and most recently Western Australia.
"We are excited to partner with Raiden in the advancement of the Pilbara Gold portfolio and also gain exposure to Raiden's existing copper and gold asset base in the world class Western Tethyan belt" said Dale Ginn, the executive chairman for Pacton.
"This transaction allows us to retain our key Pilbara project in Egina, while remaining a significant participant in the exploration for "Hemi" style gold deposits.
"We retain a 25% carried interest and become a significant shareholder of Raiden Resources, and are confident that Raiden will carry out aggressive and meaningful exploration on the Arrow, Yandicooginaand and Booalyerriei projects. Our primary focus is on our Red Lake projects where drilling is now underway on the Main Block LP style targets and on the Sidace Zone."
Under the terms, C$500,000 will be paid to Pacton along with the issue of over 129.7 million shares in Raiden (value at around C$2.6 million). A further C$500,000 will be paid to Pacton on the first anniversary after completion.
Pacton will retain a 25% carried interest in the assets until there is the delineation of a JORC mineral resource (or another globally recognized code) of at least 250,000 ounced of gold at a minimum grade of 1 gram per ton g/t across any of the properties.
Then, the parties will be required to enter into a joint venture, under which Pacton can contribute proportional to its respective equity interest or dilute.
Last month, Pacton said it had kicked off drilling at the Sidace gold project in Red Lake. The first phase of the 11,500 meters (m) program will continue through the winter and will be completed in the spring of 2021.
Pacton said drilling will test extensions of the Main Discovery, Upper Duck and Anderson zones, with an initial focus on the Main Discovery Zone.
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