LONDON: Gunsynd PLC (AIM: GUN) said Monday it has entered into a binding property purchase agreement to acquire historic mining licences in Manitoba, Canada, expanding its Barb Project with high-grade gold prospects.
The agreement with vendor Peter Dunlop covers licences known as Lotus 1 and 2, Denver and Brook. The deal includes a CAD$250,000 cash payment and the issuance of more than 11.6 million new ordinary shares.
The acquisition adds the Lotus Mine and Denver and Betty shafts to Gunsynd’s portfolio, consolidating its land package in the Rice Lake greenstone belt. The belt, which extends into Ontario’s prolific Red Lake district, has produced about 30 million ounces of gold historically.
Historic exploration results at Lotus and Denver showed grades significantly higher than Gunsynd’s previous assays. Esso Resources’ 1980 drilling campaign reported average grades of 17 grams per ton, with highlights including 213 g/t over 0.3 meters. Denver sampling in the 1990s averaged 17 g/t, while a 2014 campaign by JOVG Resources reported assays as high as 221 g/t.
As part of the transaction, Gunsynd will grant Dunlop a 2.5% net smelter royalty, with an option to reduce it to 1% through partial repurchase.
Separately, Gunsynd issued 50 million new shares to its Employee Benefit Trust, bringing the trust’s holdings to 140 million shares, or about 8.8% of the company’s enlarged capital. Admission of the shares to trading on AIM is expected Jan. 16.
Hamish Harris, Gunsynd’s chairman, said the acquisition provides “ready-made drill targets” and will be prioritized in upcoming exploration. “The area has long been known to have gold occurrences but hasn’t been systematically explored largely due to fragmentation of ownership,” Harris said.