Sage Gold Inc. (TSX VENTURE:SGX) ("Sage") has entered into an agreement to acquire the remaining 40% interest in the Clavos Gold property ("Clavos") located in Timmins, Ontario from St Andrew Goldfields Ltd., a wholly-owned subsidiary of Kirkland Lake Gold Inc. (collectively referred to as "Kirkland Lake Gold").
As part of the agreement, Sage is required to pay Kirkland Lake Gold $1,000,000 in cash and grant Kirkland Lake Gold a two percent (2%) Net Smelter Return Royalty ("Royalty") over Clavos. Sage may at any time purchase one-half of the Royalty by providing Kirkland Lake Gold written notice as well as a cash payment of $1,000,000, which will thereby reduce the Royalty rate to one percent (1%). On completion of this agreement Sage will own 100% of Clavos, subject to certain pre-existing royalty interests.
The agreement is subject to a number of conditions including the completion of an equity investment of $1.85 million by CRH Mezzanine Pte. Ltd. a wholly-owned subsidiary of Cartesian Royalty Holdings Pte. Ltd and regulatory approval. This equity investment forms part of an $11.5 million financing package to be provided by Cartesian Royalty Holdings Pte. Ltd. The financing will be used to fund the purchase of Kirkland Lake Gold's interest in Clavos, the development and restart of the Clavos Gold project, retire outstanding secured debt and fund working capital.