S2 Resources (ASX:S2R) said Wednesday (December 4) that it has signed an earn-in deal with Valkea Resources (TSXV:OZ,OTCQB:OZBKF) as part of the recently completed sale of its Finnish assets to Valkea.
S2 has gained the right to earn an 80 percent interest in Valkea’s Silverspoon, Yeungroon and Ballarat West gold projects in Victoria, Australia, by providing funding of AU$1.2 million within four years.
Silverspoon holds one granted exploration licence and is located 15 kilometres southeast of the Fosterville gold mine, while Yeungroon comprises three licences and covers 728 square kilometres near Charlton and Wedderburn.
Ballarat West is a 788 square kilometre project that “covers several known historically productive ‘deep lead’ gold mines beneath the widespread post-mineralisation basalt cover within the project area.” No exploration has been performed so far, but S2 believes that the deep leads hint at its potential to host significant bedrock gold mineralisation.
“S2 can withdraw from any or all of the projects at any time providing the tenements are in good standing on a pro-rata expenditure commitment basis for a minimum of three months from the date of its withdrawal notice,” the firm said.
The earn-in period will only start once parties have satisfied the agreement’s conditions.
Should S2 be unable to undertake exploration due to land access, permitting delays or other outside restrictions, the company will be entitled to a reasonable earn-in term extension.
The agreement is subject to Valkea receiving TSX Venture Exchange approval and ministerial approval in Victoria.
S2 holds a 45 percent stake in Valkea as part consideration for the sale of its Finnish asset.
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.