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Quebec-focused explorer Yorbeau Resources (TSX: YRB) has agreed to sell its flagship Rouyn gold property to a group of Australian investors for C$25 million ($18.5 million), in a move that it says will help shore up its balance sheet.
Lac Gold Pty Ltd, an Australian investment group focused on precious metals, will make an initial payment of C$2 million to Yorbeau and another C$3 million at closing, after which the title of the Rouyn project will transfer to Lac Gold. The remaining C$20 million will be paid in three equal instalments afterwards.
The Rouyn property covers a 12-kilometre stretch of the Cadillac-Larder Lake Break, one of the major fault zones in Quebec’s Abitibi region, and has a total area of nearly 27 square kilometres.
Due to its size, the property is divided into several major blocks, two of which has had significant exploration in the past with a combined NI 43-101-compliant gold resource of over 70,000 oz. Recent exploration by Kinross Gold also highlighted the potential of an additional 1.7 million oz., though this figure requires further exploration to confirm.
“The Rouyn property is an outstanding opportunity. We are focused on Quebec, being ranked as one of the world’s most attractive mining investment jurisdictions, and it is apparent that the Yorbeau team has defined a considerable mineral endowment with clear potential to rapidly increase in size,” commented Matthew Keegan, chairman of Lac Gold.
Following the sale of the Rouyn project, Yorbeau will now focus on exploration and pre-development activities at its other properties. “The Yorbeau exploration team will now have the necessary funds to accelerate exploration on key target sites,” said G. Bodnar Jr., president and CFO of Yorbeau.
A main focus will be the Scott Lake zinc-copper deposit near Chibougamau. The project comprises three 100%-owned blocks with a combined resource of 3.6 million tonnes grading 0.95% copper and 4.17% zinc in the indicated category and 14.3 million tonnes grading 0.78% copper and 3.19% zinc inferred.
Shares of Yorbeau Resources shot up 37.5% by 11:30 a.m. ET on Wednesday, for a market capitalization of C$23.1 million.
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