Chalice Gold Mines Ltd. said Dec. 12 that it signed a binding option and farm-in agreement to acquire up to a 70% stake in Khalkos Exploration Inc.'s Forsan gold project adjacent to its East Cadillac gold project in Quebec.
Under the deal, Chalice can earn the stake after completing payments totaling C$375,000 and spending about C$1.8 million in exploration expenditures at Forsan, both over a five-year period. Upon the earn-in's completion, Khalkos will retain a 1% net smelter royalty on the claims provided that all royalties on Forsan do not exceed 3%.
Chalice will maintain a pre-emptive right over the Khalkos royalty and has the right to withdraw from the deal at any time without earning an interest in Forsan.
The deal allows Chalice to consolidate its landholding in the area, adding about 12 square kilometers to its East Cadillac project. The company plans to start a review of Forsan's historical exploration results and merge the date with that of East Cadillac for an integrated approach to exploration targeting over the consolidated land position.
