(Kitco News) - Sirios Resources (TSX-V: SOI) said today it has signed a property option agreement with Sumitomo Metal Mining Canada, pursuant to which it has agreed to grant to Sumitomo an option to acquire up to an 80% interest, following an investment totaling $14.8M on the Aquilon gold property, located in Quebec.
The Aquilon gold property is 100% owned by Sirios and consists of 140 mineral claims covering an area of 68 km2. It is located in Eeyou Istchee James Bay, Quebec, 10 km south of the Laforge-1 hydroelectric power station and is easily accessible by all-season roads.
The company noted that to date, 32 gold showings have been discovered on the property, adding that drill intercepts on the Aquilon project are among the highest gold grades reported in Quebec, which includes 12,906.5 g/t Au over 0.20 m (Lingo showing), 3,527.4 g/t Au over 0.40 m (Moman showing) and 133.67 g/t Au over 0.82 m (Fleur-de-Lys showing).
Pursuant to the agreement, Sumitomo can earn an initial 51% interest in the project by paying a sum of $200,000 at signing to Sirios and incurring an aggregate of $4.6 million in mineral exploration expenditures, on or before the third anniversary of the option agreement.
Sirios said it will be the operator during this earn-in period, entitled to a 10% management fee. A firm commitment of $1.6-million will be spent on the property during this earn-in period.
Sumitomo can earn an additional 29% interest in the project, for an aggregate of 80%, by incurring an additional aggregate of $10 million in mineral exploration expenditures, on or before the sixth anniversary of the option agreement.
The company added that following the earn-in of an 80% interest, Sumitomo and Sirios will form a joint venture in respect of the project. In the event a joint venture participant's interest is diluted to below 10%, it will convert its joint venture interest to a net smelter return royalty of 2%.
Sirios Resources is a Canadian-based mining exploration company focused on developing its portfolio of gold properties in the Eeyou Istchee James Bay region of Quebec.
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