Orminex nabs two high-grade gold projects in Canada
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Gold player Orminex (ASX:ONX) has acquired a couple of high-grade gold projects in the prolific Abitibi Greenstone Belt in Quebec, Canada.
The company is buying the Rocmec gold project and the Denain gold project from Nippon Dragon Resources (TSX:NIP) for CA$5,000,000 (around A$5,420,000) payable in three tranches.
Orminex non-executive chairman Dean Hely said the acquisition complements the company’s portfolio and establishes a platform for an exciting period of growth.
“Securing the purchase of Rocmec and Denain aligns with our strategy of acquiring assets in Tier-1 jurisdictions that allow us to use the proven skillset of our current team in unlocking previously unrealised value from high-grade gold projects,” he said.
“We are excited by the ability to rapidly commence exploration at both projects and have identified a swift pathway to generate JORC 2012 resource estimates for Rocmec and Denain.”
The company has aggressive exploration plans for the December quarter – which will be funded by a planned $8 million placement and $1.5 million share purchase plan.
“As a result of our diligence process, we are confident about our ability to deliver significant resource upside opportunities we have recognised,” Hely said.
“The increased level of activity we see from both small and large cap companies in the Abitibi Belt region of Ontario and Quebec, both in exploration and M&A, is an indication of the value of the Orminex acquisitions in this world-class jurisdiction.”
The historic resource at Rocmec consist of 2.1 million tonnes at 7.1g/t for 479,000 ounces gold, including 570,000 tonnes at 6.52 g/t for 120,000 ounces classified as measured/indicated.
The projects have had no significant exploration in the past decade, and the company has already identified immediate follow-up drill targets at both Rocmec and Denain.
Plus, the historic Rocmec underground mine remains ventilated and dewatered for immediate access to drill platforms – and Orminex is confident of its resource growth potential.
To satisfy Canadian-law expenditure requirements, the company will pay Nippon CA$1,085,000 (around A$1,180,000) for exploratory drilling on the projects prior to 31 December 2022 – but the funds will be used as directed by Orminex.
Nippon will also be granted a 1% net smelter royalty on revenue received from certain individual veins, and Orminex will have the ability to purchase half of the royalty for CA$1,000,000.
Plus, the company will provide Nippon with 4,500 ounces of gold within 48 months of the commencement date along with access to the projects to demonstrate its patented thermal fragmentation technology.