Sentinel Metals ASX:SNM has entered into a binding agreement to acquire the Big Springs gold project in Nevada from Capricorn Metals ASX:CMM.
The $26 million cash and shares deal represents a transformational milestone for Sentinel, establishing the company as an emerging North American gold player with a combined resource base of approximately 2 million ounces across two advanced projects in Tier-1 mining jurisdictions.
Total upfront consideration for the acquisition comprises $8.5 million in cash and $5m worth of Sentinel shares., with the cash component to be funded by a $15m placement to sophisticated and institutional investors priced at $0.58 per share.
A contingency consideration of $12.5m will be payable in two tranches on the achievement of pre-determined milestones including a mineral resource estimate of at least 2Moz gold and a 20-day volume weighted average share price being greater than or equal to 150% of the capital raising price.
Prolific Project Location
Big Springs is located within the prolific Independence Trend, adjacent to the Jerritt Canyon mine complex owned by First Majestic Silver Corp and approximately 70 kilometres north-east of the Carlin Trend, which hosts more than 88Moz of historical gold endowment.
The project—which hosts a resource estimate of 15.5 million tonnes at 2 grams per tonne gold for 1.01Moz of gold—includes a mine plan currently permitted for open-pit and underground mining operations.
Historical mining at Big Springs produced approximately 386,000oz of gold at an average grade of 4.1g/t from seven open pits between 1987 and 1993.
Sentinel believes the project offers substantial exploration and development upside, with past work identifying multiple high-grade ore shoots that remain open at depth and have been largely untested by modern drilling.
The company also believes there are significant new opportunities across the broader 93 square kilometre landholding with the potential to significantly enhance the company’s scale, project pipeline, and strategic optionality, positioning it to attract a wider range of North American and global institutional investors.
Compelling Gold Platform
Managing director Matt Herbert said the acquisition of Big Springs would create a compelling North American gold development platform for Sentinel, complementing its activities at the Columbia gold-silver project in Montana.
“Big Springs delivers an additional large-scale, advanced gold asset with potential near-term production optionality and a pipeline of exploration and development opportunities that we believe can create significant long-term value for our shareholders,” he said.
“We see near-term opportunities to grow the existing resource through drilling of high-grade extensions beneath the historical pits, while also unlocking the broader district-scale exploration upside across the surrounding tenure and progressing studies to further optimise the existing mine plan.”
“This is an opportunity that is consistent with Sentinel’s strategic focus as a North American gold company and fits well within our wheelhouse as an explorer and developer focused on advanced exploration assets in high-quality locations.”