Taku Gold Corp. entered an option agreement to fully acquire Golden Predator Mining Corp.'s Sonora Gulch gold property in the White Gold District of Canada's Yukon Territory.
Under the terms, Taku issued 4.5 million shares to Golden Predator and will be required to complete additional share issuances to exercise the option.
Taku will issue 3.5 million shares valued at C$1.4 million one year after closing and another 3 million shares valued at C$1.2 million on the two-year anniversary of closing.
Golden Predator will retain a 1% net smelter return royalty on production from the property, according to an Aug. 2 release.
The Sonora Gulch property comprises 259 mineral claims covering 5,414 hectares. Previous work on the property identified the Amadeus, Night Music and Gold Vein porphyry zones where gold mineralization was intersected via diamond drilling.
Golden Predator noted that the deal is in connection with the previously announced divestment of noncore assets to Taku as it focuses on the high-grade 3 Aces gold project, also in Yukon Territory.
Prior to the transaction, Golden Predator owned 5,250,000 Taku shares, representing about a 14.98% stake, along with 1,750,000 warrants. Following the acquisition, it will own 9,750,000 Taku shares, or a 24.65% interest.
Assuming the exercise of the warrants, the company will hold 11.5 million shares, or about a 27.85% stake in Taku.