A press release was distributed last week indicating the Aurion Resources Ltd has signed a binding letter of intent with Gammon Gold Inc. This letter of intent will ultimately give Gammon the option to earn up to a 70% interest in Aurion’s 100% owned La Bandera gold project in Durango Mexico.
Aurion acquired La Bandera only a year ago and since then, they have been working through the early exploration phases. By their own admission, they have been working to attract a joint venture partner. Gammon’s proven track record with similar mine building operations in Mexico makes them an attractive option for Aurion.
La Bandera
The La Bandera site contains an epithermal gold vein system that is more than 20 km long, but it has never been truly explored. Only seven drill holes were ever completed by previous workers. Still, there is evidence of widespread gold in quartz veins, breccias, and stockworks occurring over the length of the system.
Aurion aims to remedy that and according to its press release, “has outlined a more than 2300 m long by 300 m wide Au-in-soil geochemical anomaly coincident with a clay alteration zone which hosts widely spaced quartz veinlets. Individual soil samples assayed up to 2.07 g/t Au and individual rock chip samples of the quartz veins assayed up to 73.7 g/t Au.”
The Details of a Letter of Intent
The agreement between the two companies states that “Gammon can a earn an initial 51% interest by making $5 million in exploration expenditures over 36 months, including a firm commitment to spend a minimum $1 million in the first 12 months. Gammon can earn an additional 19% by completing a minimum $7 million in additional expenditures or by completing a positive feasibility study within 5 years of earning 51% and forming a Joint Venture.
In addition, Gammon will make a $250,000 private placement in Aurion, purchasing share units priced at a 30% premium to the 30-day moving average of Aurion’s share price as of the date of signing a Definitive Agreement. Each unit comes with a 1/2 warrant priced at a 50% premium to the 30-day moving average of Aurion share price, as of the date of signing a Definitive Agreement.
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