Rogue Resources Inc. entered into a letter of intent to acquire Victoria Gold Mines East Timmins Ltd. from a Timmins, Ontario-based resource developer.
Victoria Gold Mines owns the early stage Golden Arrow gold project, covering more than 700 hectares of patented and staked mining claims in Ontario. All permits are in place for open pit production of up to 600 tonnes of mineralized material per day.
The letter agreement also covers the acquisition of an affiliate of the seller that holds certain royalty interests in Golden Arrow, according to the Oct. 10 release.
Rogue Resources must pay C$1.4 million and issue C$500,000 worth of shares upon closing, with another C$1 million in cash and C$1.3 million worth of shares due upon achieving certain milestones.
In addition, the company agreed to a C$45/oz royalty on the first 19,000 ounces of gold produced and a 1% net smelter royalty on all additional production from the project.
Closing is anticipated in December subject to various factors including the engagement of a contract operator and toll miller, and finalized project financing.
Rogue Resources' developing project finance strategy is expected to be a combination of an equity component with existing investors and a larger, discrete financing with new partners.
The company also said it expects to make final logistics arrangements to generate quartz sales from its Snow White project, also in Ontario, in the fourth quarter.