Sirios signs $14.8m Aquilon option agreement with Sumitomo

Sirios Resources, the Canadian-based mining exploration company, has said that it has signed a property option agreement with Sumitomo Metal Mining Canada, which will see it grant Sumitomo an option to acquire up to 80% interest in the Aquilon gold property, following an investment totalling US$14.8 million.

Located in Eeyou Istchee James Bay in Quebec, the Aquilon gold property is 100% owned by Sirios and consists of 140 mineral claims covering an area of 68 square kilometres. It is 10-kilometre south of the Laforge-1 hydroelectric power station and is easily accessible by all-season roads. 

To date, 32 gold showings have been discovered on the property. Drill intercepts on the Aquilon project are among the highest gold grades reported in Quebec, which includes 12,906.5 g/t Au over 0.20 m (Lingo showing), 3,527.4 g/t Au over 0.40 m (Moman showing) and 133.67 g/t Au over 0.82 m (Fleur-de-Lys showing).

Dominique Doucet, chief executive officer of Sirios, stated: “We are honoured and very pleased to start working with Sumitomo to kick off a rigorous and systematic exploration program on the Aquilon property. We believe that this property is very prospective and remains underexplored considering the variety of favourable geological contexts in which numerous high-grade gold showings have been discovered. 

“We rank Aquilon as a high-priority project for Sirios and we look forward to advancing the project with our partner having the financial and technical capacities to develop the numerous discoveries into an important mining project.”

Sumitomo Investment

Pursuant to the agreement, Sumitomo can earn an initial 51% interest in the project by paying a sum of US$200,000 at signing to Sirios and incurring an aggregate of US$4.6 million in mineral exploration expenditures, on or before the third anniversary of the option agreement. 

Sirios will be the operator during this earn-in period, entitled to a 10% management fee. A firm commitment of US$1.6 million will be spent on the property during this earn-in period.

Sumitomo can earn an additional 29% interest in the project, for an aggregate of 80%, by incurring an additional aggregate of US$10 million in mineral exploration expenditures, on or before the sixth anniversary of the option agreement.

Following the earn-in of an 80% interest, Sumitomo and Sirios will form a joint venture in respect of the project. In the event a joint venture participant’s interest is diluted to below 10%, it will convert its joint venture interest to a net smelter return (“NSR”) royalty of 2%.

In related news, Sumitomo said that an agreement had been reached with IAMGOLD for Sumitomo to provide additional funding for the development costs of the Côté Gold Project in Ontario, Canada, with the parties holding a combined 92.5% stake in the project, and a current 70:30 stake-holding ratio, with Sumitomo holding 30%.