McLaren Resources: The McCool Transaction
On May 14, 2020, a very interesting transaction was announced in the historic, highly prolific Timmins Gold District in Northeastern Ontario, where gold production has exceeded 70 million ounces. McLaren Resources (CSE: MCL) completed a purchase and sale agreement, along with an option agreement, with Goldcorp Canada Ltd, a subsidiary of one of the world’s biggest gold producers, Newmont Corporation (TSX: NGT). The deal involved Goldcorp acquiring McLaren’s Augdome property in exchange for Newmont’s McCool and Kerrs gold properties.
The agreement entered into by McLaren and Newmont Corp essentially amounts to a trade arrangements. In exchange for Newmont transferring its 100% interest in it’s McCool gold property and its Kerrs gold property, McLaren issued an option agreement for Newmont to acquire a 100% interest in its Augdome gold property. Both the McCool property, at 275 hectares, and the Kerr property, at 775 hectares, will be subject to a 1% net smelter return interest held by Newmont. Past geotechnical information on the properties will also be transferred.
The option on McLaren’s Augdome property will have an expiry of four years. The option largely consists of a $500,000 payment being made in exchange for the property, which will be adjusted based on CPI. Further, Newmont has the right to conduct any exploration or geotechnical work on the property it deems suitable during the lifetime of the option. Much like Newmont’s arrangement, McLaren will retain a 1% net smelter royalty on the property upon the exercise of the option, and pass along any data that the company has on the property to Newmont.
The Augdome property, measuring in at 408 hectares, is of interest to Newmont as a result of it being located immediately east of the firms Dome Mine. The Dome Mine is part of the firms Porcupine Operation, located in the Tisdale and Whitney Townships. In fact, the trade deal with McLaren Resources came about due to Newmont wanting to expand this open pit mine, with the expansion area running over into the Augdome property. This enabled McLaren to have their choice of Newmont properties in the district.
The McCool Property
McLaren’s new McCool property consists of 275 hectares east of Timmins, Ontario in the McCool township. As stated above, the company has a 100% interest in the property, subject to a 1% NSR, with the property being located a short two kilometres north of Highway 101.
Numerous nearby mines and deposits exist in the area of the McCool Property, including:
- Fen Gib Deposit property, located five kilometres east
- The Holt Mine Complex, located twenty kilometres east
- The Golden Highway property, located one kilometre south
- The Back Fox Mine, located fifteen kilometres west
Furthermore, several additional deposits are located within the Destor Porcupine Fault Zone. The geological structure trends east to west through the Timmins District, and onwards into the Province of Quebec.
McLaren will soon be applying for permits for an exploration program and hopes exploration could commence by the fall of 2020.
With 66,622,511 shares outstanding on fully diluted basis and a small market cap of only $4 million, this transaction makes McLaren an interesting junior gold explorer to keep an eye on going forward.
FULL DISCLOSURE: McLaren Resources is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover McLaren Resources on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
