Medgold Resources Corp (CVE:MED) (OTCMKTS:MGLDF), a gold exploration company targeting early-stage properties in the Balkan region, said Monday that it inked a letter of agreement with privately-held Gecon EOOD for an exploration license application made by it for the Zlogosh property, in Kyustendil Oblast, western Bulgaria.
In a statement, Medgold said that the main mineralized targets at Zlogosh are situated approximately 40 kilometers by road from Medgold's Tlamino project in Serbia, with which they appear to “share considerable geological similarity.”
Zlogosh’s relative proximity to Medgold's Tlamino Project is shown below:
In the statement, Medgold said work at Zlogosh identified multiple gold-in-soil anomalies, including the 1,350 meter by 600 meter Zdravkov Dol target, within which trench sampling returned intervals including 4.70 grams per ton (g/t) gold over 10.0 meters and 2.21 g/t of gold over 8 meters. Other gold-in-soil targets include Kretsul, which returned 5.61 g/t of gold over 4 meters in trench sampling, and Dobri Dol which returned 3.04 g/t of gold over 10 meters and 8.64 g/t of gold over 5 meters in trenching.
Reported soil and trench sample results within the Zlogosh Property are the work of previous operators. Details of sample collection, preparation and analysis are not known. Similarity of geology between the Zlogosh Property and the Tlamino Project is not evidence for the similarity of mineralization, noted the company.
After due diligence, Medgold is planning drilling and other exploration activities at Zlogosh targeting a mineral resource of a similar order – or greater – than that seen at the Tlamino project, it said. Extensive historical datasets of stream sediment, soil and rock samples are available for Zlogosh, and Medgold intends to apply its understanding gained in similar exploration at Tlamino to these highly prospective targets. Medgold said it “remains committed” to advancing the Tlamino Project in parallel with activities at Zlogosh.
Under the terms of the agreement, Medgold has the right to complete due diligence activities at Zlogosh which, if satisfactory, give Medgold the right to enter into an option agreement with Gecon EOOD. The option agreement will allow Medgold to earn an initial 51% interest in Gecon EOOD by financing nearly €330,000 (US$358,198) in permitting and permitting-related expenditures, followed by a second option to earn a further 44% interest in Gecon EOOD by incurring approximately €650,000 (US$705,542) in exploration expenditures.
The remaining 5% interest in Gecon EOOD may be purchased by Medgold for €200,000 (US$217,090) in cash on the third anniversary of the Zlogosh exploration license once awarded or, at the election of the residual shareholder, for €200,000 (US$ 217,090) in shares of Medgold after the attainment of exploration expenditures to the value of €1,000,000 (US$1,085,780)
Medgold’s Tlamino project covers around 200 square kilometers in southern Serbia and is held by Medgold under two exploration licenses - Donje Tlamino and Surlica-Dukat. It has reached a milestone at its Tlamino project in Serbia, with the publication of a maiden resource for the Barje prospect there. Medgold, via its joint venture with Fortuna Silver Mines Inc (NYSE:FSM) (TSE:FVI), carried out exploration and then diamond drilling at Barje in 2018 and 2019, successfully encountering gold mineralization in a shallowly inclined body of breccia.
The maiden NI 43 101 inferred resource comes in at around 680,000 ounces of gold-equivalent (from 1.1 million tonnes) at a grade of 3 grams per ton (g/t) at a cut-off grade of 0.7 g/t, Medgold said in a statement.
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