Mining News: News Nuggets: Constantine funds Palmer JV with Ontario gold assets sale
Constantine Metal Resources Ltd. Nov. 7 said it has entered an agreement to sell a portion of its gold properties in Ontario for C$4.5 million, funds that it can apply to furthering exploration at the Palmer project near Haines, Alaska. “Upon closing the transaction Constantine will have more than $5 million in cash to co-fund the exploration development of our advanced flagship Palmer copper-zinc-silver-gold project in Southeast Alaska,” said Constantine Chairman Wayne Livingstone. Lake Shore Gold Corp., a division of Tahoe Resources Inc., has agreed to buy Horseshoe, Four Corners and the Meunier, mineral claims adjacent to Lake Shore’s Fenn-Gib gold project, from Constantine. In addition to receiving C$4.5 million in cash, Constantine will retain a 1 percent net smelter return royalty on the Horseshoe claims, as well as the right of first refusal on the NSR associated with the underlying property agreement. The agreement does not include Constantine’s Munro Croesus, a historical bonanza grade gold property in the area. As part of the agreement, Lake Shore will transfer full ownership of a patented mining claim contiguous to Munro-Croesus to Constantine. Lake Shore will hold a 1.5 percent NSR on this claim. “We continue to control significant landholdings in Timmins, including the past producing Munro Croesus Gold Property, and retain exposure to the Fenn-Gib project through our NSR royalty rights on the properties being sold,” Livingstone added. At the onset of 2013, Dowa Metals & Mining Co. Ltd. and Constantine inked a deal that provides the Tokyo-based smelting and mining company with the opportunity to earn a 49 percent stake in the Palmer project by investing US$22 million over a four-year span. Dowa, which has invested roughly US$19.5 million of this earn-in requirement, intends to earn its 49 percent stake in the property by the end of 2016. Any unspent funds at that time will be deposited in an account to cover initial joint venture expenditures. Following formation of the JV and use of the carry-over funds, Constantine and Dowa will fund the project in proportion to their ownership interest.
-Shane Lasley
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