As it progresses towards acquiring a maximum undivided 71% interest in the Malartic gold property in the Archean Abitibi greenstone belt in Quebec, Dundee Precious Metals has made a second payment to Pershimex Resources (TSX-V: PRO). In the latest payment, Dundee paid Pershimex C$80,000 in cash and 20,000 common shares of its stock.
The two companies partnered on the project in 2017, back when Pershimex was named Khalkos. Per the pact, Dundee will earn its interest in stages. For a 51% stake in the project, Dundee is responsible for paying Pershimex C$412,500, of which C$92,500 was due upfront. The company also needed to spend C$2.5 million in three years on exploration work at Malartic, which it completed in March.
The latest payment, received on July 2, gives Pershimex 45,000 shares of Dundee.
To earn the remaining 20%, Dundee needs to spend another C$3.5 million in exploration at Malartic.
The Malartic property consists of 91 contiguous claims covering 35 square kilometers of prolific Abitibi geology. It is located about 12 kilometers northwest of the Canadian Malartic mine of Agnico Eagle (TSX: AEM)(NYSE: AEM) and Yamana Gold (TSX: YRI)(NYSE: AUY). The Agnico/Yamana mine began commercial production in 2011 and is projected to produce 660,000 ounces of gold in 2019.
The Malartic property is also just 2 kilometers east of Agnico’s high-grade gold Lapa mine. Lapa operations began and 2009 with the celebration of the end of the mine’s life in 2018.
Exploration work at Malartic in 2017 and 2018 by Dundee included a 2,000-meter drilling campaign, geophysical and geochemical surveys. This past February, a 5,833-meter drilling campaign was undertaken targeting the Revillard and Malrobic/ASPI prospects to expand upon previous drill data that cut 1.4 grams per tonne gold over 10 meters. At Revillard, a major shear zone with pyrite and quartz veins was intercepted more than 400 meters beneath the surface. At Malrobic/ASPI, bluish quartz vein with visible gold was intercepted within a shear zone.
Assay results from the recent drill program are pending, which will keep investors on the lookout in the near term for more evidence of high-grade gold.
“Indeed, the presence of gold mineralization on the surface and in depth confirms the continuity of the mineralized zone,” said Robert Gagnon, Pershimex’s President and Chief Executive Officer, in a statement today. “Additional exploration works will be planned soon with our partner to advance this project,” he concluded.
Shares of Toronto-listed PRO are flat in Thursday trading at 3.5 cents. The thinly-traded stock hit a 2019 high at 5.5 cents on June 3 and is currently up 16.7% so far this year.