- Fosterville South (TSXV:FSX) has announced the purchase of three Australian gold properties from Mercator Gold Australia
- The transaction will cost Fosterville approximately C$448,000
- The company must also pay $0.90 per measured gold ounce and $0.90 per produced ounce of gold over the life of the project to Mercator
- All properties lie in historically producing gold districts
- Fosterville South (FSX) is up 6.7 per cent at $1.28 per share, with a market cap of $58 million
Fosterville South Exploration (TSXV:FSX) has agreed to the purchase of three Australian gold properties from Mercator Gold Australia for C$448,000.
The transaction gives Fosterville 100 per cent interest in the Timor Project, the Avoca Project and the Moormbool Project.
Within central Victoria, the Lachlan Fold Belt is divided into three zones based upon different geological and metallurgical characteristics.
The westernmost of these zones is the Stawell zone, home to the Avoca project. The Avoca goldfield produced 750,000 ounces of gold primarily from alluvial gold deposits.
The easternmost zone is the Melbourne Zone, home to the Moormbool project. This property is immediately east of the company’s subsidiary, Currawong Resources, which owns the exploration property Moormbool East Exploration license.
The Timor project sits to the immediate east of the Avoca goldfield within the Bendigo zone of the Lachlan Fold belt.
The transaction consists of a $448,000 payment to Mercator for the rights to the properties, along with an ongoing deferred payment.
The payment is $0.90 for every one ounce of gold or gold equivalent of measured resource, indicated resource or inferred resource that is located on the tenements, with payment not exceeding $900,000 in total.
Further to this, if Fosterville reaches production on any of the sites, they are required to pay $0.90 per ounce of gold or gold equivalent produced from the tenements, again with payment not exceeding $900,000.
CFO of Fosterville South, Rex Motton, said “we added three robust gold projects without any underlying royalty payments to Mercator.
“The deferred payments are minimal and only payable as we increase the value of these projects.
Fosterville South (FSX) is up 6.7 per cent to $1.28 per share at 3:57pm EST.