It’s a done deal: As Nevada-focused explorer explorer Fairchild Gold (WKN A3D1D5 / TSXV FAIR) as just announced, a definitive agreement has been signed to acquire the Golden Arrow gold and silver project!
As a result, Emergent Metals, the owner of the project which already holds a resource of 296,000 ounces of gold and 4.36 million ounces of silver, will receive:
- $600,000 in cash, of which $250,000 was previously paid as a non-refundable down payment;
- 12,500,000 common shares;
- a $3,500,000 principal amount of the debenture, subject to an early redemption clause whereby (i) the Company shall repay $500,000 of the principal amount immediately upon the completion of a financing by the Company with gross proceeds of at least $3,000,000, and (ii) the Company shall repay USD 2,500,000 of the principal amount within six (6) months of the closing date, whereupon the remaining balance of the note shall become due and payable and the security interest shall terminate; and
- a net smelting royalty of 0.5% on the property, subject to customary buyback provisions
The Company is also required to post a reclamation bond of approximately US$40,000 upon closing of the transaction.
The Golden Arrow property is located within the Walker Lane Shear Zone, east of Tonopah and not far from the Round Mountain gold mine, which has been in production for many years and is owned by industry giant Kinross. It is an advanced gold and silver project with two core zones, Gold Coin and Hidden Hill, situated geologically on the western edge of the Kawich Caldera within a volcanic field. Typical features include epithermal gold-silver systems with structural control—a setting that allows for both large-volume disseminated mineralization and higher-grade veins. In addition to the known resource bodies, there are several larger target areas and step-out opportunities that have been only limitedly tested to date.
Advanced permitting process
Another advantage of Golden Arrow is its existing permitting framework: a previous Plan of Operations and an Environmental Assessment from the U.S. Bureau of Land Management already permit up to approximately 73 kilometers of drilling. This will allow Fairchild Gold to quickly launch a work program upon completion of the transaction—ranging from geological mapping and sampling to geophysics and step-out drilling at Gold Coin and Hidden Hill, as well as in previously under-explored areas to the south and west of the property.
In our view, the now-finalized acquisition of Golden Arrow – subject only now to customary regulatory approval – marks a significant milestone in Fairchild Gold’s Nevada strategy. The combination of an existing resource base, approved drilling, and a location in a productive district points to rapid further development of the project – especially since Executive Chairman Nikolas Perrault emphasized some time ago in a Goldinvest interview that Golden Arrow is viewed not as an exploration project but as a development project that could already be a mine in today’s price environment!
