Newrange Gold Inc (CVE:NRG) (OTCMKTS:NRGOF) announced Tuesday that it has signed an option agreement to earn a 100% interest in the Western Fold Property in Ontario from AurCrest Gold Inc, subject to a 2% net smelter return.
The property comprises approximately 2,300 hectares in the Birch-Uchi Greenstone Belt in the Red Lake Mining District, approximately 12 kilometers northwest of the Springpole gold deposit.
Newrange said the Western Fold Property contains a magnetic signature that is indicative of a strongly folded iron formation similar to that hosting the Musselwhite Gold Mine in northwestern Ontario. Although the Western Fold iron formation has never been drill-tested, this geological setting is considered to be highly prospective for gold mineralization.
"Iron Formation Gold Deposits are known around the world as a subset of Precambrian gold deposits," said Newrange CEO Robert Archer in a statement.
"Having worked at the Musselwhite Mine and the Tucano Gold Mine in Brazil, I am personally familiar with this geological model. Furthermore, Robert Carrington, Newrange's president, is familiar with the Springpole deposit from his tenure as CEO with Gold Canyon before it was purchased by First Mining. As such, we are no strangers to Northwestern Ontario, which is enjoying a resurgence of exploration success."
He added: “We see the Western Fold Property option as a low cost and potentially high reward opportunity for the company while we continue to advance our flagship Pamlico Project."
The terms of the agreement call for Newrange to make cash payments totaling $200,000 and issuing an aggregate of 1 million common shares over a two-year period to earn a 100% interest in the property, subject to a 2% Net Smelter Return royalty, half of which can be purchased for $1,000,000.
The company's stock recently traded up 7.7% to C$0.14 a share in Toronto.
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