ASX listed gold developer Calidus Resources has signed a definitive agreement with TSX-listed Pacton Gold Inc, for disposal of the company’s non-core conglomerate gold rights over certain tenements at the Warrawoona gold project in the eastern Pilbara region of WA.
The company will now be awarded 7 million ordinary shares in Pacton and may be entitled to the issue of up to 3 million additional shares in Pacton 12 months after the date of execution of the agreement, pending the performance of Pacton’s share price.
Calidus Managing Director Dave Reeves said: “I am pleased to announce the execution of the definitive agreements governing the relationship between Calidus and Pacton over the conglomerate gold rights at Warrawoona.”
“The only condition precedent to completion remains the approval of the TSXV for the transaction. This transaction allows us to fully focus on the development of our conventional shear hosted (gold) deposit where we currently have 2 drill rigs turning whilst maintaining (our) exposure to the conglomerate gold space …”
The TSX-V could take up to 45 days to approve the transaction.
Eric Sprott-backed Pacton said it is now the third largest landholder in the Pilbara for conglomerate gold exploration.
The Canadian company recently entered into a strategic processing alliance with Artemis Resources, for utilisation of that company’s Radio Hill plant south of Karratha, WA.
Calidus’ agreement with Pacton confers the rights to that company to explore and mine for nuggety, conglomerate style gold over 8 tenements, with Calidus retaining all shear-hosted and basement gold rights to the land holdings.
Calidus will retain the title to the tenements, with Pacton liable for any rehabilitation and environmental obligations and costs incurred for any on-ground activity in relation to the conglomerate gold rights.
Pacton is required to spend a minimum of CAD$50,000 per annum in aggregate on all included tenements during each 12-month period from the commencement of the deal.
The tenements do not include areas covered by Calidus’ current gold mineral resources or planned drilling programs where the company already has a JV agreement in place with fellow TSX-V listed Novo Resources Corp. for those areas.
Calidus is drilling flat out at its Warrawoona gold project and is scheduled to announce an upgrade of its mineral resources in the December quarter this year, which will underwrite a PFS set down for completion in the first half of 2019.
The current global mineral resource inventory at Warrawoona clocks in at just over 700,000 ounces of gold and dates from December last year.
The deal over the conglomerate ground at Warrawoona looks like a very prudent one for Calidus.
There is very little down side for Calidus and potentially lots of upside if the various theories about gold nugget riches being transported around in sedimentary sands amongst the hard rocks in the Pilbara checks out.
If Pacton get onto something it will be a bonus and if it doesn’t then Calidus still has a bunch of free shares in the TSX-V listed company, whilst retaining full ownership of its flagship gold play that is only likely to get bigger over time at Warrawoona.
By Matt Birney
