Riley Gold has signed an exploration and venture option agreement with Kinross Gold for the PWC gold project in Nevada, US.
The deal could see Kinross earn up to a 75% interest in the project, with a minimum investment of $20m (C$27.06m).
The PWC project, located in Lander County, spans around 24.7km² in the Cortez District, known for its gold production.
Kinross will take over as the operator of the project and has the opportunity to initially acquire a 60% interest by spending at least $10m on qualifying work expenditures.
To increase its stake to 75%, Kinross must invest an additional $10m within two years after the initial earn-in.
A Nevada LLC will be established to hold the interests of both Kinross and Riley Gold in the PWC project once the initial option is exercised.
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Should Kinross decide to proceed with the second earn-in option or if it is terminated, both companies will contribute to the LLC’s ongoing operations in line with their ownership percentages, with standard dilution clauses in place.
If Riley Gold’s stake in the LLC falls to 10% or below, their interest will convert to a 2% net smelter return royalty.
Furthermore, Kinross will subscribe for a 9.9% equity stake in Riley Gold through a private placement. This investment involves eight million units at C$0.15 each, totalling C$1.2m in proceeds.
Riley Gold CEO Todd Hilditch said: “We are excited to partner with Kinross on our PWC Project. Their global proven track record speaks for itself as well as specific regional expertise that includes ownership and operations of two gold mines in Nevada (Round Mountain and Bald Mountain).
“Our PWC project is within the Cortez District that has a significant history of gold production and current reserves. PWC adjoins Nevada Gold Mines LLC, a joint venture between Barrick Gold Corp. and Newmont Corporation, that has current production within their Cortez/Pipeline complex.
“We look forward to significant exploration efforts by Kinross at PWC beginning this spring.”
