Sudbury's Manitou Gold is selling its northwestern Ontario gold exploration properties in the Dryden area to Dryden Gold Corp., a privately-owned company.
The option agreement involves the Kenwest and Gaffney properties, which are being sold for $7 million. Manitou receives four million shares of Dryden Gold and retains a 1 per cent net smelter royalty.
Dryden Gold is expected to fund exploration expenditures totalling $1,400,000 over a three-year period.
Dryden Gold is controlled by the founders and management of Ely Gold Royalties., a public company that was sold in 2021 to Gold Royalty Corp. for approximately $300 million.
“We are excited that Dryden Gold Corp. will be taking the lead in advancing exploration on the Dryden properties," said Manitou president-CEO Richard Murphy in a March 7 news release.
"Manitou will become a significant owner of Dryden Gold, who will be pursuing an initial public offering later this year, following which Manitou will retain a large insider ownership position of Dryden Gold.
"We believe strongly in the potential of the Dryden properties and look forward to our future participation in the exploration upside of these properties through our large shareholding in Dryden Gold, as well as our retained net smelter royalties on the properties.”
Kenwest is 35 kilometres south of Dryden, in the Boyer Lake area, and covers 599 hectares. Gaffney is in the Lower Manitou Lake area, 60 kilometres south of Dryden. It covers 4,560 hectares and contains two former mining operations, the Gaffney Shaft and the Bee Hive Shaft.
Manitou Gold's main focus is its Goudreau gold project, 50 kilometres northeast of Wawa where the company initiated a winter drilling program in January.