Discovery Alaska, an Australian mineral exploration company, has signed a binding mining lease agreement with Doyon for its Vinasale gold project in the US state of Alaska.
The lease spans around 6,500 hectares and marks a significant step in the company's growth strategy.
The agreement grants Discovery Alaska exclusive rights to explore, develop and market minerals from the Vinasale project area.
The initial term of the lease is 15 years, with an option to extend by five years if a feasibility study is completed and the company is not in default.
Located 310km from Anchorage and 26km from McGrath, the Vinasale project sits on land owned by Doyon, an Alaska Native Regional Corporation.
The project has an inferred resource estimate of 22mt at 1.53g/t for 1.08moz of gold and an indicated resource estimate of 2.29mt at 1.84g/t for 135,000oz of gold.
The company is due to conduct exploration planning works to establish a comprehensive exploration and development programme. The mineralisation with the project extends over a 400m strike length and remains open to the south and at depth.
The lease payments to Doyon include $15,000 (A$22,429) upon signing.
Between the lease years of 2025 and 2027, the annual payments will be $40,000, and $70,000 between the lease years of 2028 and 2033.
From 2034, the annual lease payments will be $225,000, until the lease is terminated, “provided, that if Lessee exercises its option to extend the Initial Term, such annual payment shall be increased to US$300,000 for each Lease Year after exercise of such option”.
The company has agreed to pay $200,000 after completing a feasibility study on any portion of the project and $600,000 after it approves a decision to mine.
Mandatory expenditures will range between $40,000 in 2024 and $1.5m per year after 2035, before commercial production starts.
Doyon will also receive a net smelter returns (NSR) royalty on all minerals produced. Until the fourth anniversary of starting production, it will receive 1.5% from base minerals.
From the fourth anniversary of start of production, until the eighth anniversary, a 3% NSR will be paid for base minerals.
After the eighth anniversary of the start of production, greater than 3.5% of NSR for base minerals or 15% of net proceeds from the base minerals will be paid.
Discovery Alaska will also retain the right to terminate the lease at any time with written notice to Doyon.
Discovery Alaska director Jerko Zuvela said: “We are excited to progress the project development in a world-class jurisdiction, unlock unrealised value and establish a platform for a significant period of growth for the company.
“This is a significant opportunity to rapidly develop an advanced gold project at an exciting time for the gold sector with record gold prices and within a proven high-quality gold district.”
