East Bailey is comprised of 109 unpatented mining claims covering 7.8 square kilometres of highly prospective mineral tenure contiguous with Pony Creek. Total consideration for the acquisition of East Bailey is 250,000 shares of Contact Gold and the granting of a 2% net smelter returns (“NSR”) royalty over certain portions of East Bailey which do not already have royalties in place. Existing royalties over certain portions of East Bailey are comprised of a 3% NSR royalty, with the option to reduce the NSR royalty to 1%.
This acquisition increases the size of Pony Creek by a further 8% to 1,325 unpatented mining claims covering 107.4 square kilometres. Since June 2017, the Company has added 438 claims to Pony Creek, increasing the property position by over 40%. Including the Dixie Flats and North Star gold properties, Contact Gold now controls approximately 134.8 square kilometres (52 square miles) on the Carlin Trend adjacent to Gold Standard Ventures’ Railroad project and proximal to Newmont Mining’s Rain and Emigrant mines.
Matthew Lennox-King, President and CEO, Contact Gold, commented “The acquisition of East Bailey continues to strengthen Contact Gold’s district-scale land position on a very active area of the South Carlin Trend. East Bailey has a favourable structural and stratigraphic setting conducive to hosting Carlin-type gold deposits. The widespread, low grade to anomalous gold values obtained from a limited number of shallow historic drill holes, which were mostly completed prior to critical CSAMT surveys in 2006 and 2007, demonstrate that East Bailey is prospective for the discovery of Carlin-type mineralization.”
