GFG Resources Inc. agreed to acquire the Sewell gold property, adjacent to its Pen gold project in Ontario, from Alamos Gold Inc. subsidiary Richmont Mines Inc. for C$100,000 worth of shares.
The company said June 1 that it will issue 390,930 common shares for the claims, noting that this represents a purchase price of approximately C$100,000 based on its 10-day volume weighted average price.
GFG Resources will issue another 500,000 common shares to Richmont Mines if it defines a resource at Sewell containing at least 500,000 ounces of gold within five years of the deal closing, which remains subject to various conditions including approval from the TSX Venture Exchange.
The company is planning to incorporate the new claims into an 8,000-meter drill program planned for the third and fourth quarters.
"We believe that the historic high-grade drill intercepts and grab samples on the Sewell property are part of a four-kilometer-long gold trend that we have outlined in our new structural model," GFG Resources President and CEO Brian Skanderbeg said in a statement.
