Canadian Gold to acquire Hudbay Minerals’ Tartan West property in Canada

Canadian Gold has entered into an option agreement with Hudbay Minerals to acquire full ownership of Hudbay’s Tartan West property, which is located adjacent to the former company's Tartan mine in Flin Flon, Manitoba, Canada.

This option could bolster Canadian Gold's plans to revive the Tartan mine by adding high-grade gold resources.

Under the terms of the option agreement, Canadian Gold must meet specific cash, share payments and work commitments over five years to exercise the option fully.

An initial payment of 185,185 shares will be made when the earn-in period commences, with no associated cash payment or work commitment.

A further payment of 555,555 shares and a work commitment involving an initial field work programme costing C$100,000 ($71,545.5) will be made by the first anniversary.

On the second anniversary, the agreement stipulates no cash payment but necessitates a share payment of 1.11 million shares and a more advanced field work programme with a commitment of C$250,000.

The third anniversary requires a cash payment of C$150,000, a share payment of 1.29 million shares and a work commitment of C$800,000 for an initial drill programme.

For the fourth anniversary, the terms include a cash payment of C$325,000, a share payment of 3.14 million shares and a work commitment for a secondary drill programme costing C$1.5m.

Finally, on the fifth anniversary, the terms culminate with a cash payment of C$350,000, a share payment of 3.7 million shares, and a work commitment for a third drill programme with a budget of C$1.7m.

Upon doing so, the company will secure a 100% interest in Tartan West, while Hudbay will receive a 2.5% net smelter return on the property.

Some share payments stipulated in the agreement may also be made in cash, subject to TSX Venture Exchange approval.

Canadian Gold CFA, president and CEO Michael Swistun said: “We believe the addition of this property would significantly increase the scope and scale of exploration opportunities for the company.

“In time, we believe that additional high-grade resources that may be present on this property could deliver significant operational synergies that will bolster the already compelling economics for the restart of the Tartan mine.”

The option agreement offers exploration potential of the Tartan Shear Zone, which could double in size from 8km to 16km.

Historic drilling in the area has yielded high-grade gold results, with notable assays such as 44.2 grams per tonne (g/t) over 2.5m and 595.2g/t over 0.2m.

A single process facility at the Tartan mine could serve multiple ore sources along the Tartan Shear Zone, potentially reducing capital expenditure per ounce if production restarts.