Canarc Resource (TSE:CCM)(OTCBB:CRCUF) has signed a C$10 million earn-in agreement with Australia-listed PanTerra Goldto advance its New Polaris gold mine in B.C. through the feasibility and permitting stages, the company said.
PanTerra has 30 months to earn a 50 percent interest in the project by spending a total of C$10 million across three stages of pre-development, which will include metallurgical test work, additional drilling, environmental permitting and the completion of a feasibility study.
Canarc said the goal is produce refractory gold concentrate at its New Polaris mine, which will be shipped for processing into dore gold bars at PanTerra's Albion plant in the Dominican Republic.
"The signing of this agreement is a major step towards advancing the New Polaris Gold Mine to production," stressed chief executive officer of Canarc, Catalin Chiloflischi, in a statement.
"We are pleased to have Panterra as our strategic partner that shares our vision of New Polaris Gold Mine becoming an important Canadian high-grade gold mine."
PanTerra, a gold and silver producer based in Australia, operates its flagship Las Lagunas gold-silver tailings retreatment project, which processes tailings from the historic production at the Pueblo Viejo mine in the Dominican Republic.
The Australian company is credited with the world's first use of the Albion process for oxidation of refractory ore containing precious metals. The Albion process, which was developed by commodities giant Glencore, is a combination of ultra-fine grinding and oxidative leaching at atmoshpheric pressure.
The sulphides in the ore feed are oxidized and liberated, allowing the wanted metals to be recovered by conventional means.
PanTerra said it is expecting that its recoveries from tailings will significantly improve when processing "clean refractory concentrate" from a mining operation such as New Polaris.
The remaining life for existing tailings in the Dominican is expected to coincide well with New Polaris' anticipated timeline to production, Canarc said.
Under the first stage of the agreement, PanTerra will spend C$500,000 over five months. The first half will be paid to Canarc within two days, while the remainder will be paid within 90 days of signing the agreement. The early work will involve the production of flotation concentrate in the lab, followed by test work at Glencore's Albion plant in Australia.
If PanTerra chooses to proceed with the next two stages, it will earn a 50 percent stake following completion of the third stage and will be appointed manager of operations.
The New Polaris mine has current resources of 519,000 ounces in the measured and indicated categories and another 636,000 inferred. Canarc said last month it will also seek a financial partner to continue exploration drilling at its Windfall Hills project in central BC, as well as evaluate advanced gold properties throughout the Americas for possible acquisitions.