Dec 10 2014
Medgold Resources Corp., the European-focused gold exploration company, is pleased to announce that it has granted to Centerra Gold Inc. the option to acquire up to 70% of the Lagares, Balazar, Castelo de Paiva and Valongo licences in northern Portugal.
Dan James, the President of Medgold, said, "The signing of the Option Agreement with Centerra is a significant milestone for the Company providing funding security for the project without immediate equity dilution and allowing us to plan for drilling at Lagares in early 2015. The signing of the Agreement follows our recent announcement of the identification of high-grade, broad and strike-extensive oxidized gold mineralization on the Lagares license. We are now well-positioned to build on these results with additional exploration programs at Lagares and beyond within the extensive Valongo Belt Property."
The Valongo Belt Property
The Valongo Belt Property, of which Lagares is the principal licence, is located in Northern Portugal and covers an area of approximately 600 square kilometres. The Valongo Belt is a northwesterly trending terrain of metamorphosed sedimentary rocks which have been folded into a major anticline, with both limbs of the fold dipping to the northeast and an intrusive contact existing along its eastern flank. There are numerous historical metal occurrences of gold and antimony throughout the belt. A detailed geological description of the Valongo Belt can be found on our website at: http://www.medgoldresources.com/s/valongo-belt.asp.
Medgold has focused its recent exploration activity on the Lagares license which covers the key prospects of Castromil and Serra da Quinta, located along a northwest-trending faulted intrusive contact which is cut by northeast-trending faults. Mineralization is associated with fault intersections, lithological contacts and brecciation. The interplay of these features has resulted in the trapping of gold in the granitic rocks immediately east of the intrusive contact. Recent channel results included: 69.00 m @ 4.15 g/t Au; 40.70 m @ 5.73 g/t Au, including 5.20 m @ 15.50 g/t Au; and 15.50 m @ 9.44 g/t Au, including 4.00 m @ 18.00 g/t Au (see Medgold press release dated December 2nd, 2014).
Work in 2015 will focus on extending the areas of gold mineralization by lengthening existing channel sample lines and by sampling further along the strike of the fault-controlled mineralized corridor, which is now defined for 4 kilometers. Medgold and Centerra are currently planning an initial phase of diamond drilling to assess the continuity at depth of the mineralization that was tested by the surface channel samples.
Option Terms
Medgold has granted to Centerra the exclusive right to earn a 51% interest in the Property by incurring expenditures on the Property totaling USD$3.0 million over three years, of which USD$500,000 is committed to be spent by Centerra. To keep the option in good standing, Centerra must incur USD$1.0 million in the first year, a further USD$1,500,000 in the second year, and a further USD$500,000 in the third year. Of these expenditures, USD$100,000 will be paid to Klondike Gold Corp. to complete Medgold's obligations relating to its purchase of the Property from Klondike earlier in 2014. Medgold will be the initial operator and manager of the project.
Once Centerra has acquired the initial 51% interest in the Property, it may acquire a further 19% (for a total 70% interest) by incurring an additional USD$3.0 million on exploration within two years.