Scorpio Gold (TSX-V: SGN) announced that it has granted an option to Titan Mining (TSX: TI) to earn an 80% interest in the Mineral Ridge property, located in Nevada.
The terms of the agreement require Titan to spend $35 million in staged expenditures over a period of five years to earn an 80% ownership interest in Mineral Ridge Gold LLC, an indirect subsidiary of Scorpio Gold which holds all of the mineral rights and water rights comprising the Mineral Ridge property.
In order to maintain this earn-in option in good standing, Titan must incur in expenditures of $7 million on or before January 1, 2022, then a further $7 million on each of the third, fourth and fifth anniversaries of the commencement of the effectiveness of the earn-in option.
In addition to this, if Titan spends the initial $7 million of expenditures by January 1, 2022, it will also have the right to acquire a 100% interest in MRG by making a cash payment to Scorpio Gold of $35 million on or before December 31, 2022.
“The Titan agreement provides a direct opportunity to build on the substantial value of the Mineral Ridge property that was outlined in the 2018 updated feasibility study. Titan has stated their intention to immediately commence a comprehensive drilling campaign that will focus on the down-dip and strike extensions of the existing deposits and systematically test seven other high-priority exploration targets,” Brian Lock, Scorpio Gold CEO, said in a media statement. “This will be the first wide-ranging exploration drill program conducted on the nearly 14,000-acre Mineral Ridge property in the history of Scorpio Gold’s tenure.”
Mineral Ridge has a fully permitted mine and mill operation that is currently on care and maintenance. Mining on the site was suspended in November 2017, however, Scorpio Gold continues to generate limited revenues from residual but diminishing recoveries from the leach pads.
According to the miner, approximately one million ounces of gold have been produced from underground and open-pit mining operations over the property’s +150 year history.