Kirkland Lake Gold has finalized an option agreement with respect to Wallbridge Mining’s Detour East property, located about 11 km east of the Detour Lake gold mine. The companies had previously signed a non-binding term sheet for a joint venture at the property.
During the initial five-year period, Kirkland Lake may acquire an undivided 50% interest in the Detour East property by funding phase 1 expenditures of $7.5 million, with a minimum commitment of $2 million in the first two years. It will also have the right to act as operator of the project.
Upon satisfaction of the option, the two companies will then form a joint venture on Detour East, with Kirkland Lake acting as the operator.
Kirkland Lake will have the right to acquire an additional 25% interest by incurring a further $27.5 million within the first five years of the formation of the JV.
The Detour East project is part of the 739-sq.-km Detour-Fenelon gold trend land package that came with Wallbridge’s acquisition of Balmoral Resources. It covers over 20 km of the Sunday Lake Deformation Zone (SLDZ), a major east-west structure in the northern Abitibi greenstone belt.
The SLDZ structure is host to Kirkland Lake’s Detour Lake operations, now the second-largest gold mine in Canada with production of 659,000 oz. per year.
This story originally appeared on www.MINING.com.