Klondike Gold options new properties

Klondike Gold Corp. Feb. 16 announced its plans to acquire the Quartz and Sulphur properties from C2C Gold Corp., located in the Dawson Mining District in Yukon, Canada, which would increase its land holdings by 27%.

"We welcome the opportunity to consolidate our land position covering the prospective southeast side of the Klondike District into one contiguous district-spanning claim group," said Klondike Gold CEO Peter Tallman. "The claim package will allow systematic exploration, evaluation and ranking of gold targets across the district with geological understanding of variations and potential zonation."

Already exploring numerous targets on its namesake gold project in the hills above the famed Eldorado and Bonanza placer gold streams, two of the more advanced deposits – Lone Star and Stander – host 21.59 million metric tons of indicated resource averaging 0.68 grams per metric ton (468,901 ounces) gold and 6.46 million tons of inferred resource averaging 0.54 g/t (111,959 oz) gold.

Consisting of 689 mining claims covering 143 square kilometers (55 square miles) of prospective Klondike goldfields, with the addition of Quartz and Sulphur, Klondike Gold will have nicely consolidated its land holdings, filling out two gaps on the map.

In return for the acquisition by Klondike Gold for 100% interest in Quartz and Sulphur, plus 12 years of exploration data, the terms of the property acquisition agreement are thus:

• The issuance of one million common shares of Klondike Gold to C2C Gold.

• The granting to C2C of a 1% net smelter returns royalty in respect of the Quartz and Sulphur properties, of which Klondike may purchase one-half of the NSR royalty from C2C for C$500,000 cash at any time; the Quartz and Sulphur properties each have underlying 2% NSR royalty obligations where Klondike Gold has the right to purchase one-half of each NSR royalty for C$1 million cash and has right of first refusal to purchase the remaining 1%.

Upon completion of the transaction, Klondike Gold will have expanded its property land position to cover a total of 3,913 quartz claims in one contiguous district-encompassing property covering a 727-square-kilometer area, essentially expanding the property area by 27%.

"Klondike Gold believes there is significant potential for multiple discoveries and this consolidation will allow the greatest opportunity for testing the best possible targets," said Tallman.