Magellan Gold Corporation reports that it has signed a stock purchase agreement for acquiring Clearwater Gold Mining Corporation that holds specific unpatented mining claims in Idaho County, Idaho. The claims include the historic Center Star Gold Mine close to Elk City, Idaho.
The Center Star Mine presents high-grade gold mineralization unraveled in the early 1900s. Throughout the 1980s, periodic historic production and development work was performed under various ownerships.
As the high-grade gold mineralization exists, Magellan will be assessing the historic mine data to evaluate the potential to establish a gold resource at Center Star. The project area is situated close to the town of Elk City, Idaho, and 45 miles from Grangeville, Idaho.
Magellan has taken Clearwater’s 100% issued and outstanding shares into consideration, agreeing to pay 1,000,000 shares of Magellan common stock and $150,000 to its sole shareholder.
Magellan will issue the 1,000,000 shares in this manner: (1) 250,000 shares at closing, (2) 250,000 shares when a permit is given to reopen the main portal of the Center Mine, (3) 250,000 shares when the main portal reopens, and (4) 250,000 shares two years from the closure coinciding with the pay-off of the secured promissory note.
A cash consideration of $25,000 shall be offered within 30 days of the closure, and the balance amount of $125,000 will be evidenced by a secured promissory note, which is due in two years. Clearwater shares and assets will help secure the note.
The Center Star Mine acquisition is the first in the company’s new focus to acquire and develop early to mid-stage exploration targets or near-term production plays in North America. Center Star fits our focus perfectly with a former operating history and known gold occurrences that we believe may lead to resource development and potential near-term production of the property.
John Power, President and Director, Magellan Gold Corporation
At Center Star Mine, gold mineralization is found in several parallel quartz veins in a banded gneiss. Similar to several historic mines in the Elk City area, gold is hosted in steeply dipping quartz veins.
The gold exists in high-grade veins at the Center Star Mine, where the veins trend northeast and dip steeply toward the southeast. These veins exist in a 75′ to 100′ wide shear zone that presents quartz veins and breccia.
The gold-bearing veins are regarded to differ in width from a few inches to 20 feet and include gold from 0.35-ounce gold/ton to multi-ounce per ton gold depending on historic mine data. Historically, the property was developed by several owners and has had some gold and silver production history.
In the past 35 years, no exploration or development work has been conducted at the Center Star Mine, yet it has the potential for considerable ore reserves.