Benton Resources Inc.
, Stock Forum
) has entered into an option agreement with Tenacity Gold Mining Company Ltd.
to purchase a 100% interest in four mining claims which encompasses the 04, 41, Isle Aux Mort and the Big Pond gold deposits located in southwest Newfoundland.
Benton will, subject to regulatory approval, pay $400,000 and issue 1.5 million common shares and issue a further 1.5 million common shares in 12 months.
According to the Benton Resources press release
, previous exploration efforts on the four deposits have outlined a historic resource totaling 241,700 ounces of gold grading 3.7 grams per tonne gold with silver and base metal credits.
These claims are contiguous to Benton's current Cape Ray property which hosts the 51 and Window Glass Hill deposits, which combined, do contain a NI 43-101 compliant inferred resource of 206,000 ounces gold and 926,000 ounces silver with base metal credits. The 04 and 41 deposits are situated only 500 meters northeast of the 51 deposit and collectively have been historically referred to as the Cape Ray deposit.
The company intends to conduct the necessary work in order to bring the historic resources into NI 43-101 compliance.
The claims being acquired are subject to a sliding scale net smelter returns royalty (NSR) on the production of metals: a 3% NSR on production when gold is below $2,000 per ounce; a 4% NSR when gold is from $2,000 per ounce or more but less than $3,000 per ounce subject to the right of Benton to buy back 1.0% for $500,000; and a 5.0% NSR when gold is $3,000 or above subject to the right of Benton to buy back 1.0% for $500,000.
Benton is a well-funded Canadian-based junior with multiple joint ventures and a diversified property portfolio in gold, silver, nickel, copper, and platinum group elements.
On Tuesday, Benton rose 7.7% and was trading at $0.07 a share. The company had a market cap of $5.3 million, based on $75 million shares outstanding.