A Canadian mining company with projects in Morocco is stepping away from a large exploration site in Quebec so it can focus more closely on its work in Morocco.
Morocco Strategic Minerals Corporation agreed to sell the Sakami property in Quebec’s James Bay region to Visible Gold Mines.
The deal gives Visible Gold full ownership of the project. In exchange, Morocco Strategic Minerals will receive four million shares in Visible Gold. That would give it nearly 10% of the company once the deal is completed.
Morocco Strategic Minerals will also keep a 1% royalty on future production from the site. Visible Gold can buy back that royalty later for $1m.
Pierre Olivier Goulet, vice president of corporate development at Morocco Strategic Minerals, still believes Sakami had strong exploration potential. But the company now wants to focus its money and management efforts on Morocco.
“Our current focus on Morocco justifies a partnership with a group dedicated to advancing projects in Quebec,” he said.
The agreement still allowed the company to benefit from any future discoveries through its shareholding in Visible Gold and the royalty deal.
The Sakami property covers around 250 sq km and includes 475 mining claims in northern Quebec. The area sits near the geological boundary between the Opinaca and La Grande regions, a zone known for major mineral deposits.
The site is close to Newmont’s Éléonore gold mine and other exploration projects in the James Bay area.
More than $5m has already been spent on exploration work at Sakami over the years. That work included geophysical surveys, trench digging, rock sampling and limited drilling.
The project is mainly known for its gold potential. But companies are also paying close attention to the area because of signs of lithium, a key metal used in electric vehicle batteries and energy storage.
Previous sampling work found lithium anomalies on the property, making Sakami attractive at a time of growing global demand for critical minerals.
For Visible Gold, the acquisition is part of a wider expansion drive this year.
Earlier in May, the company raised C$2.6m and appointed a new chief financial officer. In March, it expanded its Horsefly property near the Chibougamau mining camp in Quebec.
Visible Gold chief executive Jean Marc Lacoste said the Sakami acquisition gave the company “a second regional-scale project in an emerging mining camp”.
Morocco Strategic Minerals has also been strengthening its finances. Earlier this month, the company completed a C$7.5m private placement to help fund its activities.
By selling the day-to-day management of Sakami while keeping shares and royalty rights, the company can still benefit from future success at the site without paying the high costs of exploration work in Quebec.
The transaction still needs approval from the TSX Venture Exchange before it can be completed.
