Gold is all set to regain its shine after a lackluster couple of years. This year, gold prices have seen an encouraging surge. Consequently, the gold mining industry is also expected to have a brighter future ahead. In order to deal with the price slump for the past few years, gold producers took a number of cost saving measures, leading to further efficiency in the sector.
With the increase in gold prices, gold producing companies are expected to go ahead with further acquisitions. Aurion Resources Ltd. (TSX-Venture:AU) announced the acquisition of two high grade gold projects in Finland. The company agreed to buy these resources from Tertiary Minerals plc, an AIM traded company dealing in the fluorspar sector. These two projects are the Kaaresselkä and Kiekerömaa gold projects.
Under the terms of the agreement, Aurion Resources will pay GBP 100,000 as initial consideration. The company is required to pay £15,000 in cash and the remaining amount of £85,000 will be paid in Aurion shares subject to certain royalties.
Aurion Resources will be required to pay a Pre-Production Royalty of US$1.00 to $3.00 per ounce of gold following the definition of a NI 43-101 (or equivalent) Code compliant Inferred, Indicated and/or Measured Mineral Resource Estimate respectively, on either project.
Tertiary will retain a 2% Net Smelter Returns Royalty (NSR) on all future gold production from either property of which Aurion can purchase 50% of the NSR from Tertiary for USD$1,000,000 at any time prior to commencement of commercial production on either project.
Kaaresselkä and Kiekerömaa gold projects are located outside Kutuvuoma in Finland. Kaaresselkä is a 315 hectare property and contains various shear zones. It also has several gold zones which may measure up to 650 m long and 16 m wide. The property is also believed to have multiple high grade drill intercepts including 11.0 g/t Au over 4.9 m, 13.5 g/t Au over 2.75 m, and 45.0 g/t Au over 2.0 m.
The property has received its geochemical and geophysical surveying from the geological survey of Finland. The gold property was acquired by Tertiary in 2003 through staking and it later carried out limited geochemical and geophysical surveys. The company also carried out drilling. However, no exploration of the property was done after 2004.
Kiekerömaa project, on the other hand, covers 840 ha. Its gold mineralization is believed to stretch over a strike length of 300 m. This property was also acquired by Tertiary in 2003. The company drilled it in 2011. The property features mineralization in all direction. Tertiary Minerals categorized both these properties as non-core asset in its portfolio.
At last check, shares of AU were unchanged at $0.40, however have been in a steady uptrend for all of 2016.
