Canadian-based mining exploration companyTomaGold Corp (LOT:CA) announced a major development with IAMGOLD Corporation (IAG) regarding its milestone Monster Lake project. TomaGold will receive a $3.22 million dollar cash payment from IAMGOLD in exchange for a 50% interest in the Monster Lake Project as part of the renegotiated terms to their agreement.
"Given the context of the market, this is a great transaction for TomaGold, as it will allow us to be fully financed while keeping an interest in a project that we truly believe in," said David Grondin, President and CEO of TomaGold.
Monster Lake consists of 114 mineral claims covering an area of 3,336 hectares. The property is located 44 kilometres southwest of Chibougamau in northwestern Quebec.
The acquisition agreement includes two future success-based contingent payments based the following specific milestones:
● IAMGOLD's decision to build a mine
● The beginning of commercial production
For each of these milestones, IAMGOLD would pay an additional $1 million to TomaGold in cash or common shares of IAMGOLD.
Furthermore, IAMGOLD will have an option to acquire an additional 25% interest by spending $10 million in exploration work, with a minimum of $500,000 spent each year, over a 7-year period. Upon IAMGOLD earning a 75% interest in the Monster Lake project, TomaGold will have the option to fund its pro-rata share of exploration expenditures to keep its interest in the project.
"This transaction also confirms IAMGOLD's strong interest in advancing Monster Lake to its full potential,” said Grondin. “Furthermore, during the last year, we increased our portfolio of properties around Monster Lake and now hold a dominant land position in the area. We believe that we will be in a good position should Monster Lake become a mine."
TomaGold originally entered an option agreement with IAMGOLD in November 2013, whereas IAMGOLD may earn a 50% interest in each of the Monster Lake, Winchester and Lac à l'eau jaune properties for a total of $17.575 million. This total includes $16 million in exploration work and $1.575 million in payments over five years.
Through this mutually beneficial and strategic deal, TomaGold continued growth looks promising through guaranteed financing and continued involvement the Monster Lake project. TomaGold, whose primary mission is the acquisition, exploration and development of gold projects in Canada and abroad, has further strengthened their position as a premiere gold mining company.
For more information about TomaGold, visit www.tomagoldcorp.com.
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