Emerging gold miner Monarch Gold has signed a binding letter of intent for the acquisition of the Fayolle property from Hecla Quebec, formerly known as Aurizon Mines (Hecla), and Typhoon Exploration.
The Fayolle property consists of 39 claims, covering an area of 1 373 ha in the Aiguebelle and Cléricy townships.
The deposit contains an historical estimate of 548 500 t grading 5.75 g/t gold for a total of 101 326 oz of gold.
Monarch said that, although the historical estimates might not be reliable, it believed that they provided an indication of the property's potential and were relevant for any future exploration programme.
In consideration of Hecla's 50% interest, Monarch would issue 12-million shares at $0.25 a share and in consideration of Typhoon's 50% interest, Monarch would pay $1.15-million and issue 3.4-million shares at an agreed price of $0.25 a share.
"These transactions are aligned with our long-term plan to acquire undervalued assets with a view to developing their full value," said Monarch CEO Jean-Marc Lacoste.
"The Fayolle project is a large property with high-grade resources, mostly delineated near the surface, and offering excellent exploration potential. Fayolle has been drilled over 60 000 m and has $8.5-million in work credits. In addition, the project is conveniently located at a reasonable distance from our Camflo mill,” he said.
Lacoste added that Monarch remained on the look-out for acquisition opportunities. It has recently bought 6.5-million shares of Canadian explorer Unigold, which operates in the Dominican Republic, giving it a 14.2% interest in the company.