On December 22, 2022, Damara Gold Corp. (TSX.V: DMR) declared that they had finalized a purchase agreement to acquire a complete undivided interest in 203 mineral exploration claims that stretch over 9,675 hectares in the Labrador Trough area of Quebec, referred to collectively as the “VanLab Property.” The agreement was finalized with two independent sellers.
The Purchase Agreement outlines that Damara Gold will acquire the VanLab Property from the sellers in exchange for the issuance of 4,000,000 units. Each unit will contain one common share in Damara Gold and one non-transferable share purchase warrant, allowing the sellers to acquire a further common share in Damara Gold at an exercise cost of $0.25 within 36 months from the closing date. In addition, Damara Gold will provide the sellers with a 2% net smelter return royalty on the closing date. The sellers may qualify for a 0.5% net smelter return royalty on any additional claims within the area of interest of the VanLab Property that Damara Gold acquires. The consideration securities (i.e., the units and warrants) must adhere to the statutory four-month and one-day hold period under relevant securities laws from the closing date.
Vanlab property is a large area of land in the Labrador trough region of Quebec, Canada, that is believed to contain various minerals, including vanadium, copper, cobalt, and scandium. According to the historical data from the Ministère de l’Énergie et des Ressources naturelles-Québec indicates that one sample from the property contained 6% vanadium. However, this result has not been independently verified. The Vanlab property has also been surveyed using modern airborne electromagnetics, magnetics, and radio metrics. The company plans to conduct a field program in 2023 to explore vanadium, copper, and cobalt.