Vancouver, British Columbia–(Newsfile Corp. – September 30, 2020) – Melkior Resources (TSXV: MKR) (OTC PINK: MKRIF) (FSE: MEK) has closed a strategic partnership with Kirkland Lake Gold. Melkior granted Kirkland Lake, a senior gold producer, the right to earn-in up to a 75% interest in its Carscallen Project located 25 kilometers west of Timmins, Ontario.
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The Carscallen Gold Project, Melkior’s flagship property, hosts 7 gold zones with 98% of drill holes yielding gold mineralization. For example, November 2019 drill results reported an intersection of 23.5 grams per tonne gold over 8.0 meters from 426.0 to 434.0 meters, including 372 grams per tonne gold over a half meter on the third deep hole CAR-19-03A.
Kirkland Lake also closed the previously announced subscription of 1,250,000 units of Melkior at a price of $0.80 per unit for gross proceeds of $1 million, with each unit consisting of one share and one warrant, with the warrant exercisable at $1.20 for 24 months.
To earn its 50% interest Kirkland Lake must complete $10 million in exploration expenditures over 5 years with a minimum commitment of $3 million during the first 2 years, which includes $1.5 million and a minimum of 3000 meters of drilling to be completed in the first year. Should Kirkland, who will be the operator, fail to incur the Phase 1 expenditures during the option period, its option shall expire. Upon Kirkland earning its 50% interest, the two companies will form a joint venture to carry on operations, with Kirkland having the right to earn an additional 25% interest by incurring another $100 million of exploration expenditures over 5 years. Any additional funds required beyond the $100 million will be shared 75%/25%.
Kirkland has the right to acquire up to 19.9% in the future by way of either secondary market purchases or future private placements and as long as Kirkland holds a minimum equity interest of 5%, Kirkland maintains anti-dilution rights with respect to future share issuances by Melkior. In addition, as long as Kirkland holds a 5% interest it will have first refusal rights with respect to any potential joint venture agreements, sale agreements or royalty agreements to be entered into between Melkior and third parties, with respect to the Carscallen Property and/or future acquired property interests.
Jonathon Deluce, CEO, stated: “We are extremely excited to close this landmark equity investment and option agreement with one of the world’s most respected gold mining companies. With Kirkland Lake Gold committing $3 million with the potential of $110 million in work commitments over the next five to ten years to attain a 75% interest in the Carscallen Project, our shareholders now have the upside of discovery with limited further share dilution to advance the project. The Carscallen Project shares a 9km border with the West Timmins Mine which had previously been managed by Tony Makuch during his tenure as President and CEO of Lakeshore Gold, the prior owner.
It will be exciting in the coming months and years to watch the progress of the Carscallen Project, which has proven to be a very high-grade gold system with indications of having VMS discovery potential. Melkior shareholders now have the upside of having a world-class operator take the Carscallen gold project to the next level by committing $3 million with the potential of $110 million in exploration expenditures over the next ten years to earn up to 75% interest in the project.
The deal signifies that there will be limited further equity dilution required to advance the project. Kirkland Lake CEO, Tony Makuch and Senior Vice President of Exploration, Eric Kallio alongside the rest of the KL’s technical team have a comprehensive understanding of the geological setting within the Timmins gold camp, which we felt as a Board made this the perfect fit. We want to thank our long-standing shareholders as we welcome Kirkland Lake Gold as a strategic partner.”
This agreement is subject to the usual regulatory approval.
In addition to Carscallen, Melkior holds a diverse portfolio of gold and base metal projects in major mining camps including the Urban area in Quebec, and the Hemlo area in Ontario.
For more information, please visit the company’s website, www.Melkior.com, contact Jonathon Deluce, CEO, at 226-271-5170 or by email at [email protected].
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