Kenorland Minerals (KLD.V) announced it has entered into an agreement with Centerra Gold (CG.TO) whereby the latter can acquire a stake of up to 70% in the Hunter project in the southern Abitibi Greenstone Belt in Quebec.
The Hunter project was staked by Kenorland in 2019 after the company completed a comprehensive review of the historical exploration data on this project which now consists of almost 20,000 hectares. The project hasn’t been thoroughly explored before as it is almost entirely covered in glacial till and lake sediments which means there’s hardly any sedimentary cover. About two years ago, Kenorland confirmed anomalous gold values in the till sampling program and in the third quarter of last year, it completed a property-wide VTEM survey which included in excess of 1,100 line-kilometers.
Centerra has now entered into an agreement with Kenorland whereby it can earn an initial 51% stake by spending C$5M in exploration on the project within the first four years after signing the option agreement. Once this first 51% stake has been established, Centerra will be able to boost its stake to 70% if it is able to publish a NI43-101 compliant resource estimate containing in excess of 1 million ounces gold-equivalent, but this also needs to happen within the same four year time frame and there’s a specific requirement for Centerra to notify Kenorland it intends to complete the second option agreement to effectively reach the 70% stake.
Upon the establishment of a 70/30 joint venture, both parties will be required to continue to contribute on a pro-rata basis or be diluted with the classic clause that anyone who falls below 10% will see their stake being converted into a 2% NSR on unencumbered claims and 1.5% on claims where an existing royalty is present.
2022 will be a busy year for Kenorland as it will likely have a lot of news flow on a variety on projects as the Hunter option agreement is the fifth project in its stable where a third party is spending money.
Disclosure: The author has a long position in Kenorland Minerals. Kenorland is a sponsor of the website. Please read our disclaimer.
