Centerra expands exploration to US with option deal

The Oakley project is 21 km south of Oakley, Idaho, and 3 km north of the Idaho-Utah state line. Credit: Otis Gold.

Centerra Gold (TSX: CG) is set to expand its exploration activities in the US, executing a definitive agreement on Monday with fellow Canadian miner Otis Gold (TSXV: OOO) to earn up to a 70% interest in the Oakley gold-silver project, located north of the Idaho-Utah state border in Cassia county.

Under the terms of the agreement, Centerra can earn a 51% interest in Oakley by incurring $4.5 million in exploration expenditures and making cash payments of $250,000 over a three-year period. The company would then have the option to acquire a further 19% of the project by incurring another $3 million in exploration expenditures and making a cash payment of $300,000 over three years.

In total, Centerra would be spending $7 million on exploration and making cash payments of $550, 000 over a six-year period to acquire a 70% interest in the gold-silver prospect.

Otis president and CEO Craig Lindsay said that the committed expenditure in the first year of the option agreement would likely result in a drill program at Oakley next year.

He also said the transaction with Centerra “has the full support” of Excellon Resources, which is in the process of acquiring Otis.

During the term of the Oakley agreement, Centerra would be the operator of the project, with Otis acting as project manager.

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