Dynasty Gold Corp. (TSXV: DYG) announced on Monday that it has entered an amended agreement with Teck Resources, whereby Dynasty will be deemed to have exercised its option on Teck’s Thundercloud gold property in Ontario.
In consideration of Dynasty being deemed to have exercised its option and Teck waiving its back-in right, the company will make a cash payment of C$100,000, ($79,000) plus an additional C$2 million ($1.59m) should a production decision be reached.
Teck will retain a 2% net smelter returns royalty that can be reduced to a 1.5% for C$1 million ($790,000). Dynasty has also granted Teck the right to receive 40% of any net sale proceeds if the property is sold or optioned within six years of signing the amended agreement.
The Thundercloud property is located in the central Wabigoon greenstone belt in Western Ontario, about 47 km southwest of Dryden. The geological setting is comparable to the Abitibi belt in Eastern Ontario, but is much less explored.
Close to 30 million ounces of gold have been discovered in recent years, including several large-scale mining operations nearby. Notable gold discoveries in the area include New Gold’s Rainy River mine (6.4moz gold, 18.7moz silver) and Agnico Eagle’s Hammond Reef deposit (5.8moz gold).
Potential discoveries for Thundercloud include bulk-tonnage orogenic gold mineralization or high-grade deposits, according to Dynasty. Historic drilling on the property has intersected 14 g/t Au over 3m, including 192.7 g/t Au over 0.55m.
Aside from Thundercloud, the company owns the Golden Repeat property in the Midas region of Elko county, Nevada. It also holds a 70% interest in the producing Hatu Qi-2 gold mine in the Tien Shan gold belt of China’s Xinjiang province.