VANCOUVER – Junior gold miner Golden Predator Corp. (TSX:GPD) has agreed to buy the Brewery Creek project in the Yukon from Alexco Resource Corp. (TSX:AXR) in a cash-and-stock deal worth about $ 8 million.
Trading in Golden Predator shares was halted pending the announcement and was set to resume at 10 a.m. ET.
Golden Predator said the deal replaces an earlier option agreement that had given it the right to earn up to a 75 per cent interest in the project.
Full ownership “is a major milestone on the road to becoming a gold producer in the Yukon,” chief executive William Sheriff said in a statement.
“Under our multi-phase development plan we will turn our immediate attention towards the completion of engineering studies.”
Brewery Creek is a past producing heap-leach gold mining operation, which uses chemicals to extract precious metals from ore, located 55 kilometres east of Dawson City.
Golden Predator will pay $ 4 million in cash minus the value of a reclamation bond estimated at $ 795,000 and will issue 7.5 million shares to Alexco. It will also issue 3.75 million share purchase warrants that entitle Alexco to buy shares at $ 1.15 for two years from closing.
Alexco will keep a two per cent net smelter return royalty on the next 600,000 ounces of gold produced from the claims, after which the royalty will rise to 2.75 per cent.
Golden Predator operates more than 5,700 square kilometres of exploration lands in the Yukon.
Local news from metronews.ca/vancouver
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