As exploration continues on its Valentine project in central Newfoundland, Marathon Gold (TSX: MOZ) has purchased for cancellation the historical 7.5% net profit interest royalty covering certain mineral resource areas on the property.
The royalty relates to certain properties at the Valentine project initially granted to Reid Newfoundland Company Ltd. in the early part of the last century, in connection with the development of the Newfoundland railway. It was initially reserved reserved in 1905 and amended in 1948 to provide for a 7.5% net profit interest on all minerals.
The royalty continues to apply today in the areas of the Leprechaun and Sprite deposits and part of the Berry deposit.
As consideration for the royalty, Marathon paid C$500,000 cash and issued approximately 1.34 million common shares (having an approximate value of C$4 million) at closing to Reid. The company has also agreed to pay Reid an additional C$3 million cash upon the formal release of the project from both the applicable provincial and federal environmental assessment processes.
According to Matt Manson, president and CEO of Marathon, the company’s acquisition of the royalty for cancellation represents “another key milestone as we progress the Valentine gold project towards a construction decision.”
Last week, Marathon released a new set of assay results from last year’s drilling at Valentine, which were said to confirm the “wide prevalence of gold mineralization” at the property outside of the confines of the mineral resources currently estimated at the Marathon, Leprechaun and Berry deposits.
Total resources at the Valentine project comprise 1.92 million oz. (32.59 million tonnes grading 1.83 g/t gold) categorized as measured and 1.22 million oz. (24.07 million tonnes grading 1.57 g/t gold) categorized as indicated. There are an additional 1.64 million oz. (29.59 million tonnes grading 1.72 g/t gold) categorized as inferred mineral resources.
The project is currently undergoing its required environmental assessment process prior to beginning construction, targeted for 2022.