Japan Gold has entered into a binding letter agreement with First Quantum Minerals to explore four of its prospective lithocap projects located on the islands of Hokkaido, Honshu and Kyushu, Japan.
The Lithocap Projects represent exploration targets for shallow-level epithermal gold and deeper porphyry copper-gold deposits. Pursuant to the terms of the Letter Agreement, FQML has committed to manage and oversee a systematic surface exploration reconnaissance program on each Project prior to June 30, 2019.
Japan Gold chairman and CEO John Proust commented: “We are delighted to partner with a company with First Quantum’s international reputation, exploration, development and production expertise and financial capability to advance four of our highly prospective gold and copper-gold exploration targets in Japan. We believe this to be a first of many validating events for our pioneering efforts to re-establish Japan as a major mining jurisdiction. Separately,
“Japan Gold’s portfolio includes an additional twelve epithermal gold projects focused on the islands of Hokkaido and Kyushu, all of which sit within historic mining districts. Taken together, we believe that the Company is in an excellent strategic position in Japan, and we heartily welcome First Quantum as a partner.”
The Projects included in the Letter Agreement are the Eboshi, Kobui, Minamikayabe and Kamitsue projects, which collectively cover a land area of 11,830 hectares.
FQML will immediately commence work on initial exploration programs at each of the Projects, which will consist of reconnaissance field work, mapping, soil and rock sampling, and targeted geophysics. FQML personnel will be working directly alongside Japan Gold, who will remain as operator during this initial program at each of the Projects.
Upon completion of the initial exploration program, as defined by a specific scope of work on each of the four Projects, FQML will have the option to enter into a formal earn-in agreement (Option Agreement) on any Project individually, pursuant to which FQML may earn-in to 51% of a Project by completing a minimum of US$5 million in total exploration expenditures prior to June 30, 2022. For any project that FQML options it will endeavour to maintain minimum average annual expenditures of US$1 million per year during the initial earn-in period.
Upon earning a 51% interest in a Project, FQML would have the right to earn an additional 29% interest in a Project by solely funding the Project until FQML makes a “Decision to Mine”, increasing FQML’s ownership in a Project to 80%.
Lithocap Project Summaries
The Eboshi project comprises nine contiguous prospecting rights totaling 3,080 ha, located near the coastal town of Noheji in northern Honshu, Japan. The project area contains a large, exposed advanced-argillic lithocap, one of several identified along the Northeast Japan Arc by government funded regional metallogenic surveys conducted in the 1980’s and 1990’s.
The Kobui project comprises eight contiguous prospecting rights applications totaling 2,738 ha, located in the Kameda Peninsula of southwestern Hokkaido. The project area contains two large advanced-argillic lithocaps separated by a younger andesitic volcanic dome.
The Minamikayabe project comprises six contiguous prospecting rights applications totaling 1,943 ha also on the Kameda Peninsula of southwestern Hokkaido. Targets include high level epithermal gold systems, and deeper potential porphyry targets associated with two broad advanced-argillic lithocaps.
The Kamitsue project comprises twelve contiguous prospecting rights applications totaling 4,069 ha, located near the town of Kikuchi in northern Kyushu. A large area of advanced argillic alteration was identified by the Company in 2018 during reconnaissance programs around historically prospected gold bearing quartz veins.
Haywood Securities Inc. is acting as financial adviser to Japan Gold in connection with the transaction. Morton Law LLP is acting as legal counsel to Japan Gold.
Source: Company Press Release