VANCOUVER, April 13, 2017 /CNW/ - NXGOLD LTD. ("NxGold Ltd." or the "Company"), (NXN:TSXV) is pleased to announce that it has entered into an option agreement (the "Agreement") with Kenorland Minerals Ltd. ("Kenorland") to earn up to a 100% interest in the Chicobi Project, located approximately 30 km northeast of Amos, Quebec (the "Property").
Chris McFadden, Chief Executive Officer, commented "The execution of this agreement with Kenorland is an exciting development for the Company. The Chicobi Project gives the Company significant exposure to the Abitibi which is one of the premier gold producing regions in the world and the large land position gives us a significant opportunity in a relatively under-explored part of the Abitibi. With the addition of this project we now have two exciting gold exploration projects to pursue year-round. We at NxGold are very excited to be entering Quebec given its strong history as a mining friendly jurisdiction."
The Chicobi Project:
The Property consists of 1,045 claims and covers approximately 60,000 hectares along 70 km of prospective strike length on the Chicobi Deformation Zone within the Abitibi Greenstone Belt (the "Abitibi"). The Property represents one of the largest land packages in the Abitibi region and is one of the most under-explored land positions in the entire district. The Abitibi is one of the largest gold producing regions globally in addition to hosting significant production of silver, copper and zinc. The Chicobi Project is well serviced by infrastructure and is readily accessible by road year-round.
The Terms:
Pursuant to the Agreement, the Company has the exclusive right to earn an undivided 80% interest in the Property (the "First Option") upon: (i) paying Kenorland $100,000 cash and issuing Kenorland 800,000 common shares in the capital of the Company (subject to a 12 month hold period), on the date all regulatory approvals to the Agreement are received and other conditions precedent are satisfied (the "Effective Date"); and (ii) incurring an aggregate of $2 million in expenditures on the Property on or before October 1, 2018.
Upon earning an 80% interest in the Property, the Company has the exclusive right to earn an additional 20% interest in the Property (the "Second Option"), thereby increasing its interest in the Property to 100%, by incurring an additional $1 million of expenditures on the Property, on or before the third anniversary of the Effective Date and the grant of a 2% net smelter returns royalty in favor of Kenorland in respect of minerals produced from the Property and supporting hypothec in respect of the Property.
In the event the Company exercises the First Option but not the Second Option, the parties will be deemed to have formed a joint venture with the Company having an 80% interest and Kenorland having a 20% interest.
The Agreement is subject to the TSX Venture Exchange approval.
About NxGold
NxGold is a Vancouver-based exploration company. NxGold has entered into an earn-in agreement with Meliadine Gold Ltd. to earn up to a 70% interest in the Kuulu Project (formerly known as the Peter Lake Gold Project). The Kuulu Project is located approximately 40 km northwest of Rankin Inlet, Nunavut. The Kuulu Project covers 4,174 hectares immediately along trend from Agnico Eagle's advanced Meliadine Gold project. Additionally, the Company has entered into an earn-in agreement to earn up to a 100% interest in the Chicobi Project located within the prolific Abitibi Greenstone Belt in Quebec
Technical Information
All scientific and technical information in this news release has been prepared by or reviewed and approved by Mr. Garrett Ainsworth, P.Geo., a director of NxGold. Mr. Ainsworth is a qualified person for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects.
