Junior gold explorer Everton Resources (CVE:EVR) said Wednesday that it has signed a letter of intent to acquire Brigus Gold's (TSE:BRD) (AMEX:BRD) remaining interest in Ampliacion Pueblo Viejo and two other concessions in the Dominican Republic.
Currently, Everton is partnered with Brigus on actively exploring in the Dominican Republic adjacent to the US$3 billion Pueblo Viejo project, which is currently being developed by gold mining giant Barrick Gold (NYSE:ABX)(TSE:ABX) and Goldcorp (NYSE:GG)(TSE:G).
Under the terms of the agreement signed today, which will give Everton 100% of Ampliacion, Everton will have to raise C$5 million through a financing, pay Brigus C$1 million in cash and issue Brigus 15 million shares in Everton.
Also, Brigus will receive a sliding scale net smelter return royalty on the concessions, equal to 1.0% when gold prices are less than US$1,000 per ounce, and 1.5% when gold prices are between US$1,000 and US$1,400 per ounce, and 2% when gold prices are above US$1,400 per ounce.
Additionally, Everton will need to incur at least C$5 million in exploration expenditures on the concessions within the next two years, including $4 million on Ampliacion Pueblo Viejo and $500,000 on each on the Ponton and La Cueva concessions.
If a measured and indicated NI 43-101 compliant resource of at least 1 million ounces of gold equivalent is estimated for either of the properties, at certain specified grades, Everton must pay Brigus an extra C$5 million, or issue 5 million common shares, whichever has the greatest value at the time.
"The signing of the letter of intent represents another step in Everton’s strategy to focus on its Dominican Republic properties, and we believe acquiring a 100% ownership interest in APV, Ponton and La Cueva will add significant future shareholder value,” said Everton president and CEO Andre Audet.
The company said the closing of the transaction is subject to the company completing its planned financing, as well as regulatory approvals.
Everton also holds properties in Ontario and Quebec, Canada.