Fremont Gold Ltd. entered into an option deal with a private party to acquire a 389-hectare property in Nevada's Elko County, the company said Aug. 10.
The property comprises 48 unpatented and 4 patented mining claims in the historic Jarbidge mining district, which is prospective for gold and silver.
Under the terms, the company is required to make an initial payment of US$50,000, a subsequent US$25,000 payment in December 2018, and then quarterly cash payments beginning in July 2018.
The quarterly payments start at US$20,000 and increase by US$2,000 per quarter for a five-year period, for a total consideration of US$635,000.
A final payment of US$5 million is payable at the end of the period but can be deferred for an additional 18 months in exchange for US$1 million.
In addition, the company must complete 9,000 meters of drilling on the property over three years and 10,000 meters of drilling or equivalent underground access work in the fourth year to exercise the option.
The property is subject to 2% net smelter return royalty.