Canadian miners Q-Gold Resources and Alamos Gold have signed a binding share exchange agreement for Q-Gold to acquire a mineral exploration project located in south-central Oregon, in the US.

The acquisition of the Quartz Mountain project will be concluded for a total consideration of $21-million and a 9.9% equity interest in Q-Gold.

The transaction will comprise of $2.8-million in cash upfront and $8.1-million of guaranteed payments in cash or common shares, at Alamos’ election, over a three-year period.  

Another $10-million in milestone payments (cash or shares) will be owing to Alamos upon the earlier completion of a feasibility study or a construction decision, which involves the first $5-million.

The second $5-million will be owing upon receiving key permits required for the construction and operation of Quartz Mountain.

Alamos CEO and president John McCluskey says the sale of Quartz Mountain is consistent with the company’s strategy of monetizing noncore assets as it develops a portfolio of high-return growth projects. Alamos operates three mines in Canada and Mexico, as well as development-stage projects in Canada.

Q-Gold is currently also exploring for gold at the past-producing Foley gold mine, in Ontario.

McCluskey says Q-Gold is well positioned to advance Quartz Mountain and looks forward to participating in the future success of the project as a significant shareholder.

The transaction is expected to close in the second quarter.

The Quartz Mountain project consists of 86 mining claims covering 704 ha. Over the years, more than 100 000 m of drilling have been conducted on site, with the majority of the work having been focused on the Crone Hill and Quartz Butte deposits, which host a measured, indicated and inferred mineral resource.

Quartz Mountain currently has 39-million tonnes of inferred resources grading 0.91 g/t of gold, for 1.1-million contained ounces.

The nearby Angel’s Camp property, which is also currently owned by Alamos and forms part of the Quartz Mountain project transaction, adds more exploration potential over 158 mining claims covering 1 248 ha.