VANCOUVER – C2C Gold Corp [CTOC-CSE] said Wednesday it has been granted an option to acquire a 70% interest in a basket of claims in the central Newfoundland gold belt, a move that adds to its existing substantial holdings in the region.
The option agreement with Buchans Resources Ltd. involves 364 mineral claims (91 square kilometres) covering the Lake Douglas and South Tally properties. Both cover key fault structures considered prospective for orogenic-style gold mineralization.
The Douglas Lake property covers the on-strike trend of the gold-bearing structures that host Marathon Gold Corp.’s [MOZ-TSX, OTC-MGDPF] Valentine project, located 15 kilometres on strike to the southwest.
The South Tally property is contiguous with the southeast boundary of C2C’s Barrens Lake property.
C2C shares advanced on the news, rising 9.5% or $0.03 to 34.5 cents in light trading. The shares are currently trading in a 52-week range of 58 cents and 12.5 cents.
Buchans holds interests in zinc, lead and silver properties in Newfoundland via its shareholding in Xtierra Inc. [XAG-TSXV].
C2C Gold is a mineral exploration company with a focus on the acquisition and development of mineral projects in Newfoundland. The company holds the Millertown, Badger and Barren Lake projects, which are all located in the Central Newfoundland Gold Belt, where C2C previously held 4,419 claims covering a 100- kilometre-long structural trend.
The company previously said the acquisition of this ground by staking is part of a strategic initiative to grow C2C into a leading company in Newfoundland’s rapidly emerging gold exploration boom.
The company also holds one of the largest land packages, with several prominent projects, within the prolific White Gold and Klondike districts of the Canadian Yukon
On April 27, 2021, C2C announced details of a non-brokered private placement of 16.4 million units priced at $0.16 per units for gross proceeds of $2.63 million. It said each unit consists of one common share and one-half of one share purchase warrant. Each full warrant is exercisable at a price of 20 cents per share for a period of two years.
The company said financier Eric Sprott agreed to subscribe for 11 million units, leaving him with 14.47% on a non-diluted basis and 19.9% on a partially diluted basis of the company’s stock. The shares were trading Monday at 18.4 cents in a 52-week range of 19 cents and 3.0 cents.
The option deal with Buchans is part of an initial option allowing C2C to earn and acquire a 51% interest in the properties and a second option, in the event that Buchans elects not to participate in the joint venture, to earn and acquire an additional 19% stake in the properties.
In order to exercise the first option, C2C must issue 100,000 shares to Buchans and fund $1.5 million worth of exploration expenses on the properties.
Upon completion of the first option, the companies can decide to embark on a joint venture held 51% by C2C and 49% by Buchans. If Buchans elects not to participate, C2C can exercise the second option by spending another $1 million on exploration.
If either company’s joint venture interest drops below 10% that company’s joint venture stake will be converted to a 2% net smelter royalty. The majority owner will have the option to buy back half of the NSR for $1.5 million.