Stocks in Montreal-based TomaGold (
TSX:V.LOT,
Stock Forum) are up early Tuesday after the company signed a $17.575 million option agreement on their Monster Lake, Winchester and Lac à l'eau jaune properties with gold giant IMAGOLD (
TSX:T.IMG,
Stock Forum).
The option, which allows IMAGOLD to take a 50% option in the properties, will consist of $16 million in exploration work and $1.575 million in payments to the $10 million market cap junior explorer over the next five years.
David Grondin, President and CEO of TomaGold, said in a
company news release: "We are proud to have signed an agreement with IAMGOLD, a major gold producer with proven expertise in Quebec and the rest of the world. IAMGOLD's financial and technical resources will enable us to explore Monster Lake and the neighbouring properties faster and in a more optimal manner. In addition, the larger work commitments mean that exploration work on the Properties will be ongoing. In short, this transaction is a testimony to the gold potential of Monster Lake and its surroundings, and we hope to eventually turn it into a mine."
The Monster Lake project lies in northwestern Quebec, 44 kilometres southwest of Chibougamau.
Since 1984, over 40,000 metres of diamond drilling have been done along the 4-kilometre mineralized corridor, according to the company.
TomaGold says, in the winter of 2012, they “drilled 16 holes for a total of 2,420 metres on the Annie zone, which resulted in a major discovery of 237.6 g/t of gold over 5.7 metres in Hole M-12-60. In 2013, the Company drilled 12 holes totalling 5,000 metres on Zone 325. All the holes intersected the gold-bearing structure, and seven of the 12 holes returned values of over 10 g/t of gold. The program also confirmed that Zone 325 was 150 metres long with a vertical depth of 330 metres, and that it was open at depth.”
Shares in TomaGold were up 17.8% on the news, rising $0.025 to $0.165, double the 52-week low of $0.08. 66 million shares are outstanding.
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