Abitibi Metals boosts resource by 62% at B26 polymetallic deposit in Quebec
Indicated resources increased to 11.3 million tonnes from 6.9 Mt.
Eldorado Gold (NYSE: EGO, TSE: ELD) announced Monday that it has entered into a definitive agreement with G Mining Ventures (CVE: GMIN) to divest its Tocantinzinho (TZ) project in Brazil for $50 million upfront, comprised of a minimum $20 million in cash and 19.9% of G Mining shares upon closing.
Tocantinzinho is a permitted and construction-ready gold project located in Brazil’s Para state.
Eldorado completed a feasibility study on the project in 2015 and published an updated technical report in 2019. The document outlines an open-pit gold mine with an expected operative life of 10 years and annual gold production of 170,000 ounces at an all-in sustaining cost of $615 per ounce.
The deposit is open at depth with no drilling deeper than 400 metres, and the large, under-explored land package presents a great deal of additional exploration potential that may yield satellite mineralized bodies.
Deferred consideration of $60 million in cash is to be paid subject to Tocantinzinho beginning commercial production, payable on the first anniversary of commercial production, Eldorado said. Upon closing of the transaction, Eldorado and GMIN will enter into an investor rights agreement which will grant Eldorado certain rights for so long as it maintains 10% ownership of GMIN common shares on an undiluted basis.
“This transaction provides Eldorado with immediate value for TZ, while also retaining meaningful exposure to future value creation through our equity stake in GMIN,” George Burns, Eldorado CEO said in the media statement.
“TZ will be a cornerstone asset for GMIN, a team with a strong track record of building mines on time and on budget,” Burns said. “Together with our local Brazilian team, we believe they are the right group to responsibly advance the asset and we look forward to following and supporting their success.”
Midday Monday, Eldorado Gold’s stock was down 4% on the NYSE. The company has a $1.5 billion market capitalization.
