LONDON (Alliance News) - Orogen Gold PLC said Thursday it has signed a deal with Galileo Resources PLC which will give it the right to earn-in to a 51% interest in Galileo's Silverton Gold-Silver property in Nevada, US.
Orogen Gold said, under the deal, it will have the right to earn-in by way of exploration expenditure of USD400,000 within 18 months on the property and, thereafter, will have the opportunity to spend a further USD1.5 million within 30 months to earn-in a further 24% interest in the property.
Galileo will have the right to participate pro rata after Orogen's first expenditure and, should it exercise this right, it would retain a 49% interest in Silverton, Orogen Gold said.
The deal is subject to due diligence and Orogen said this is expected to be completed within 45 days of signing the agreement.
Galileo noted on Thursday Colin Bird is an executive director of both companies, holding a 24.81% in Galileo and 1.82% stake in Oregon. Bird is chief executive and chairman of Galileo and chief executive of Orogen.
As such, has abstained from negotiations and the decision making process. Galileo said he will continue to do so to prevent a conflict of interest.
"We have sufficient funds in place to commence work on the project and we believe that our presence in the region will bring opportunities which could not be identified remotely. To this end we will work to identify and participate in other Nevada gold mining ventures. This project complements our Mutsk property in Armenia and provides investors with a balanced gold/exploration portfolio," said Orogen Chairman Adam Reynolds.
Shares in Galileo were up 12% at 1.26 pence on Thursday and shares in Orogen were up 35% at 0.0370p.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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