Great Bear Resources Ltd. granted Mountain Boy Minerals Ltd. an exclusive option to earn its 50% joint venture stake in the polymetallic BA and Surprise Creek properties in British Columbia, the companies said in separate June 2 statements.
The BA property covers 9,489.42 hectares while the Surprise Creek property covers 7,472.11 hectares.
The companies currently have 50/50 joint ventures on the early stage properties, with the joint ventures to remain suspended during the option period. Should Mountain Boy opt not to exercise the option or fail to make any payments or share issues related to either property, the joint ventures will resume.
Under the terms of a binding option deal, Mountain Boy will pay C$1.3 million in stages between Aug. 20 of this year to Aug. 20, 2020, and will issue 10 million shares to Great Bear in stages from the date of exchange acceptance to August 20, 2020.
The company will also make milestone payments. For the Surprise Creek property, this includes C$200,000 upon completion of a National Instrument 43-101-compliant resource estimate, another C$200,000 upon completing a pre-feasibility study, and C$800,000 upon starting construction of a mine.
Milestone payments related to the BA property include C$400,000 upon completion of an NI 43-101-compliant resource estimate, C$500,000 upon completing a pre-feasibility study, and C$1.6 million upon the start of mine construction.
Great Bear will retain a first right of refusal should Mountain Boy agree to sell the projects in part or whole to a third party.
Great Bear noted that the sale of its 50% stake in the two projects will enable capital that would have been required for exploration in British Columbia to be redirected for exploration in Ontario's Red Lake district, where it acquired the West Madsen gold project in November 2016.