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Great Atlantic secures option to buy Golden Promise gold property in Newfoundland

Great AtlanticResources Corp. said July 7 that it signed an option with WilliamMercer to acquire the Golden Promise gold property in Newfoundland &Labrador, Canada.

Under the agreement, the company will pay a total ofC$520,000 in cash, issue shares worth C$500,000, and spend C$500,000 on theproperty over a four-year period.

Mercer will be entitled to a 2% to 2.5% sliding scale grossoverriding royalty on the property, payable on start of commercial production.

At a gold price of less than or equal to US$1,500 per ounce,the gross overriding royalty will be 2%, and at gold prices of over US$1,500per ounce, gross overriding royalty will be 2.5%. Great Atlantic will have theoption to buy back 1% of the gross overriding royalty at any time for C$1.0million.

Great Atlantic signed a letter of intent to Golden Promise in lateMay.