Golden Predator Enters Choose Agreement To Acquire McConnell Property In The Yukon

Gold exploration company Golden Predator (TSX:GPD) said today it has signed an option agreement to acquire the McConnell Property, located in the Mayo Mining District in the Yukon Territory.

The other signing party was undisclosed.

The McConnell Property is immediately to the east of Victoria Gold s (TSX-V:VIT) Dublin Gulch-Shamrock block, which hosts 2.7 million gold ounces of indicated resources.

The company s target model for the property is a reduced intrusion-related gold system, characterized by sheeted auriferous quartz veins that form bulk-tonnage, low-grade gold deposits at the top of small plutons. The deposits are usually characterized by a Gold-Bismuth-Tellurium-Tungsten metal grouping.

The Vancouver-based company also reported results for 10 of 28 rock chip samples collected from sheeted veins at the McConnell property. The samples returned anomalous values in one or more of the following elements: tungsten, antimony, arsenic, bismuth, gold and silver.

As there has been no drilling at the property before, the company said it will conduct systematic mapping and sampling during the year to identify priority drill targets.

As consideration for the option, Golden Predator paid $20,000 and issued 38,177 common shares.

To exercise the option, the company is required to pay almost $0.43 million and $0.23 million in cash and stock, respectively, as well as incur exploration expenditures of about $1.4 million by November 4, 2015.

The company can also exercise the option by paying $1 million in cash by the same date.

The property is subject to a 2.5% net smelter royalty, which Golden Predator has the right to repurchase, in 0.5% increments, by paying $0.5 million for each increment.

Golden Predator will also be required to make annual advance royalty payments of $0.15 million beginning on November 4, 2016 until the property starts production, provided the average gold price for the preceding year is over USD$700 per ounce.

Under the agreement, the advance royalty payments, as well as some of the option payments, are creditable against the net smelter royalty amounts. If Golden Predator exercises the option by paying $1 million, the annual advance royalty payments will become $25,000.