Clarity Gold (CLAR) has signed an agreement with Big Ridge Gold to acquire 100 per cent of the Destiny Project in the Abitibi region of Quebec.
Located roughly 75 kilometres northeast of the city of Val d'Or, the project covers 5,013 hectares and includes the DAC deposit - one of several gold zones along a six-kilometre-long segment of the Despinassy Shear Zone within the Chicobi Deformation Zone.
Under the terms of the deal, Clarity will issue C$3 million in cash to Big Ridge, as well as $5.5 million in common shares. Big Ridge will also retain a 1 per cent royalty on the project, which Clarity may purchase within three years of starting commercial production for $1 million.
"The acquisition of the Destiny Project will mark a transformational first step for the company into the prolific Abitibi Greenstone belt," said James Rogers, CEO of Clarity Gold.
"Our team at Clarity has reviewed countless projects and we are excited to focus our efforts on a project that has high grade, underground potential with underpinning Indicated and Inferred ounces in the ground," he added.
According to a 2011 Technical Report, the DAC deposit hosts an indicated resource of 10.8 million ounces at a grade of 1.05 grams per tonne of gold, and an inferred resource of 8.3 million ounces at 0.92 grams per tonne of gold.
Previous exploration work at the Destiny Project dates back to the 1930s, with the first major drill program undertaken in 1998 by Cameco. However, since the 2011 report was published, only 15 drill holes totalling roughly 3,473 metres have been completed, along with various geochemical surveys.
Clarity Gold is currently up 4.17 per cent to $1.25 per share at 1:28pm EST.