(Kitco News) - Contact Gold (TSXV: C) announced Friday that it has entered into a four-year, US$10 million earn-in agreement with a wholly-owned subsidiary of Centerra Gold (TSX: CG) on the company's Green Springs oxide gold project located on Nevada's Cortez Trend.
Contact Gold said that pursuant to the earn-in agreement, Centerra has an option to acquire a 70% interest in Green Springs for cumulative earn-in exploration expenditures of US$10,000,000 and aggregate cash payments to the company of US$1,000,000, adding that the first-year work commitment of US$1,500,000 is guaranteed.
Contact Gold noted it will remain project manager at Green Springs, with exploration led by Contact Gold's Vice President of Exploration, Vance Spalding.
"We are very happy to be partnering with Centerra on the Green Springs project. Centerra is a renowned international gold producer, and their partnership at Green Springs will allow us to significantly accelerate exploration at the project far beyond what Contact Gold can accomplish in the current market," stated President and CEO Matt Lennox-King. "Securing multi-year funding for Green Springs allows Contact Gold to give the Green Springs project the amount of exploration work it needs, and dedicate additional capital to our resource-stage Pony Creek gold project, located on Nevada's prolific Carlin Trend."
Green Springs is located near the southern end of the Cortez Trend of Carlin-type gold deposits in White Pine County, Nevada, 20 km southeast of Calibre Mining's Pan mine and 7 km immediately east of their Gold Rock project, and south of Waterton's Mount Hamilton deposit.
Contact Gold has been advancing Green Springs since 2019, and has drilled 132 holes for 16,769 metres in that time. Drilling by the company has delivered new oxide gold discoveries at the X-Ray and Tango Zones, and has extended the historic Mine Trend to the South, where it remains open for further expansion.
Contact Gold signed a purchase option agreement with Ely Gold Royalties, now a subsidiary of Gold Royalty, to acquire an undivided 100% interest in Green Springs in July 2019. The company indicated that after entering into the earn-in agreement with Centerra, it will complete the remaining steps to complete the purchase option on Green Springs.
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