Scorpio Gold (TSXV: SGN) has granted an option to Titan Mining (TSX: TI) to earn an 80% interest in the Mineral Ridge property in Nevada.
The terms of the agreement require Titan to spend US$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, Titan must incur US$7 million in expenditures by Jan. 1, 2022, then a further US$7 million on each of the third, fourth and fifth anniversaries of the earn-in option.
In addition, if Titan spends the initial US$7 million by Jan. 1, 2022, it will also have the right to acquire a 100% interest in MRG by making a cash payment to Scorpio Gold of US$35 million by Dec. 31, 2022.
Brian Lock, Scorpio Gold's CEO, said the Titan agreement provided a direct opportunity to build on the value of the Mineral Ridge property, which was outlined in a feasibility study in 2018.
"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," Lock stated in a press release. "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 on care and maintenance. Mining 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 1 million oz. gold have been produced from underground and open-pit mining operations over the property's more than 150-year history.
- This article first appeared in our sister publication, MINING.com.