Western Australia-focused Bryah Resources (ASX:BYH) got a kick to its share price on news it is picking up a “high-grade” gold project in New Brunswick, Canada.
The company is broadening its geographical horizons with the signing of a binding option term sheet with Globex Mining Enterprises (TSX:GMX) to acquire the Golden Pike Project.
The news doubled its share price to an intra-day high of $0.008 on Wednesday (21 May) before it closed up 25% at $0.005.
The project, which sits on the Devils Pike claim, hosts a Canada-compliant but non-JORC compliant resource of 214,800 tonnes at 9.6 grams per tonne for 66,300 contained ounces of gold.
Drilling by previous explorers has returned intercepts of 13m @ 43.07g/t and 10m @ 32.26g/t, while rock chip samples have delivered grades of up 244g/t.
Bryah says the Golden Pike deposit remains open in several directions and has similar targets on untested areas featuring multiple “high-grade” boulder rock chips which have the “potential to significantly increase the resources”.
Chairman Ian Stuart says the company has been evaluating projects from around the world, with the aim of finding the one with the most value potential for shareholders.
“With the gold price currently around $5,000 per ounce and ongoing global uncertainty expected to support strong prices, this gold project in the mining-friendly Canadian jurisdiction of New Brunswick presents an exciting opportunity,” Stuart says.
“The historical resource provides a solid foundation, with the potential to upgrade and increase the gold resource with additional drill targets to be explored.”
Globex has granted Bryah an option in exchange for C$20,000 ($22,327) cash to undertake due diligence over a two-month period to determine if it wants to buy the Golden Pike Project.
Once a formal sale contract has been signed, Bryah has agreed to pay $80,000 cash and issue $200,000 worth of shares to Globex.
Bryah, which has a market capitalisation of about $4.3 million, will also make three further staged payments totalling $600,000 cash and $900,000 worth of shares in the first three years after the deal has been executed.
The agreement will also see Bryah spend at least $3 million on exploration over a period of four years.
Additionally, Bryah will grant Globex a 2% royalty on the first 20,000 ounces of production and a 3% royalty on any production above that.
The company can choose to buy back 1% of the 3% royalty any time before production of the first 20,000 ounces for $1 million.
Bryah says it has sufficient cash on hand to cover the initial consideration payments and start exploration, but it will have to raise further cash to meet the additional staged payment requirements.
Write to Angela East at Mining.com.au
Images: Globex Mining Enterprises
