OceanaGold (TSE: OGC) is interested in buying Bravada Gold Corporation's (TSXV: BVA) low-sulfidation Highland gold/silver project, located within the Walker Lane Gold trend in western Nevada, USA.
Both companies have signed a letter of intent which stipulates that Oceana has until December 15, 2018, to accept the opportunity of earning up to 75% interest in the project.
In detail, Oceana may earn a 51% interest by making certain cash or share payments and incurring aggregate exploration expenditures of $4 million over five years. To increase its interest to 75% within four years of earning its 51% interest, the Melbourne-based firm has to spend an additional $6 million in exploration.
The property is also subject to a 3% NSR royalty in favour of the vendors. This arrangement is subject to a reduction of the royalty to 2% upon payment of $1 million.
The 825-hectare Highland project, which Bravada acquired in 2002, consists of 102 Federal lode claims. According to Bravada, previous drilling intersected vein zones with locally high-grade intercepts. During the latest campaign, the best hole intersected 1.5 meters of 66.9 grams of gold per ton and 397.7g/t silver within a 12.2m intercept of 9.5g/t gold and 109.4g/t silver, with true thicknesses estimated at 65% of the intervals.
The miner also said that gold, silver, arsenic, antimony, mercury, and molybdenum are anomalous at the property. Surface sampling, limited production records, and drilling results indicated that silver to gold ratios are comparable to productive systems, generally less than 20:1 in better-mineralized areas.
"There is great potential at Highland to discover new, high-grade gold/silver deposits. Low-sulfidation deposits worldwide are among the highest-margin gold/silver deposits, and usually occur as clusters of similar-grade deposits of various sizes," said Bravada's President, Joe Kizis, in a media statement. "Highland's location in an established mining region in Nevada reduces risks associated with land tenure, logistics, and capital and operation costs when compared to many regions of the world. Oceana has an excellent record of discovery and production from low-sulfidation deposits, and we are fortunate to have a company with such expertise advance our Highland project," he added.