The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
BCGold Corp. Jan. 25 said it has entered into a definitive agreement to purchase full ownership, subject to a 3 percent net smelter return royalty, of Gorilla Minerals' Wels gold property in western Yukon Territory.
A pre-condition for this acquisition will be a corporate restructuring and the completion of a C$600,000 financing.
Insiders and major shareholders from BCGold and Gorilla are expected to participate in this financing.
To acquire the Wels property, BCGold will pay C$60,000 in cash and issue 8 million of its shares to Gorilla, following a 5-1 consolidation of BCGold shares.
BCGold currently has 41.8 million shares outstanding, which will be reduced to 8.4 million shares subsequent to the share rollback.
At the closing of the Wels property transaction, BCGold is required to complete a private placement of at least C$600,000 at a minimum price of C5 cents per unit, with each unit comprised of one share and one warrant.
BCGold also has agreed to add Gorilla President and CEO Scott Sheldon and Ranj Pillai, an independent director of Gorilla, to the BCGold board of directors.
This transaction requires two-thirds approval from Gorilla shareholders.
Gorilla is a tightly held, unlisted reporting issuer with 80 percent of its 10.6 million-share float held by three directors and one major shareholder.
BCGold is in receipt of written shareholder voting approval from these four shareholders.
The Wels gold property is located 50 kilometers (31 miles) east of the community of Beaver Creek, located on the Alaska-Yukon border.
The property hosts a newly discovered reduced intrusion-related gold mineralizing system, similar in age and style to Kinross Gold's Fort Knox deposit in Alaska (6 million ounces gold production to date) and Victoria Gold's Eagle Gold project (2.3 million ounces gold reserve) in central Yukon.
Gorilla picked up the Wels property in 2011 and since has been carrying out early-stage exploration, including mapping, soil and rock sampling, geophysics and trenching.
This work has identified a number of promising zones, including North Ridge, Southwest Spur and Saddle.
Rock sampling results from four trenches excavated over a portion of the Saddle zone in 2014 averaged 2.63 grams per metric ton gold over 19 meters; 5.3 g/t gold over 18 meters; 0.56 g/t gold over 25.5 meters; and 1.27 g/t gold over 25.5 meters.
In 2015, Gorilla completed five holes at the Saddle zone, the first holes drilled at Wels.
The best intercept of this drilling cut 25.5 meters averaging 2.41 g/t gold in the first hole of the program.
"This is a totally new, very exciting discovery, on ground that was first staked in 2011," said BCGold President and CEO Brian Fowler.
"BCGold is very excited to acquire the Wels Property, and we look forward to further defining and enlarging the known limits of this intrusion-related gold system through deliberate exploration efforts." BCGold plans to carry out a program of geological mapping, prospecting, and further trenching to define the limits of the Saddle zone at Wels in 2016, as well as develop drill targets on the North Ridge and Southwest Spur zones.
The company is seeking companies wishing to earn into the property through a significant exploration commitment.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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