Hidefield Gold plans to sell its Golden Zone project in Anchorage, Alaska to Fire River Gold Corp.
Hidefield has a 60% interest in the project, which has a measured and indicated resource of 253,000 ounces of gold, 1.18m ounces of silver and 6.11m pounds of copper.
Fire River has already paid $20,000 and will pay a further $30,000 after an option agreement is signed. Fire River will pay a further $225,000 in cash by the end of may 2012. Fire River will also issue 500,000 shares to Hidefield and its partner and further share issues worth a total of $1.3m will happen over the four years to May 2013.
Fire River must spend $2.5m on exploration by the end of 2014. Fire River will earn an initial 51% stake in the project once it has spent $1m and made certain payments to the current owners. It will have a 100% stake once all the payments and investment has been made.
The joint venture partners will still have a 2.5% net smelter royalty. Fire River can pay $1m to reduce it to 1.5%.
Hidefield is entitled to 60% of all these payments in cash and shares.
Shares in Hidefield rose 0.075p to 0.93p each, which values the minerals explorer at £3.79m.
Earlier this year, Hidefield converted £1.32m of debt into shares.
Hidefield’s main interests are in South America and include the Don Nicholas gold project in Argentina.
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