LONDON, UK: Chesterfield Resources plc has signed an Agreement with Pacton Gold Inc. with regard to Chesterfield’s Adeline project in Labrador.

The agreement is conditional, inter alia upon the approval by the relevant authorities at the TSX Venture Exchange, and a successful equity raise by Pacton.

Under the terms of the agreement, Chesterfield’s Canadian subsidiary Chesterfield (Canada) Inc. will sell its 100% interest in its Adeline licences to Pacton in exchange for a combination of cash and shares in Pacton.

As a result Chesterfield (Canada) Inc. will become a significant shareholder in Pacton, obtain a seat on Pacton’s board and will actively participate in the development of the Adeline project.

Chesterfield’s board anticipates that the development of the Adeline project will therefore be able to progress much more quickly and effectively than would have been the case had Chesterfield pursued the funding and carried out this work on its own.

Chesterfield shareholders will continue to have exposure to any discovery at Adeline through Chesterfield (Canada) Inc’s 19.99% post funding dilution stake in Pacton. For reference, Pacton is currently valued at CAD12.99m (£8.4m). Chesterfield’s ability to sell its shares in Pacton will be restricted according to certain terms detailed in the agreement and all payments are subject to potential tax liability in Canada.

Chesterfield Executive Chairman Paul Ensor said, “This agreement follows a process during which the Adeline project was reviewed by a number of potentially interested groups. Our pre-requisites in choosing a partner included the following: 1) the ability to promptly fund the next stage of work in Labrador 2) technical competence to carry out and successfully complete all necessary work to yield the quickest and best possible results from our Adeline licences and 3) a track record of past success in previous similar endeavours. Pacton Gold fulfils all of these criteria.

This is a good deal for Chesterfield in many respects, as it values Adeline on fair terms, whilst also potentially capturing additional value as the project is advanced. We look forward to working closely with Pacton to deliver the best possible value from Adeline to our shareholders as quickly as possible.”

Pacton Gold President and CEO Nav Dhaliwal said “Proven high-grade showings and drill ready targets make Adeline an ideal property for rapid exploration. We have an award winning in-house technical team and management with a track record for increasing shareholder wealth. With the early-stage exploration already complete, Pacton will be looking to commence drilling this remarkable property at the earliest opportunity.”