Bonterra shares rise on binding letter agreement for JV with Osisko Mining

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(Kitco News) – Shares of Bonterra Resources (TSX-V: BTR) (OTCQX: BONXF) are trading up today after the company announced a binding letter agreement with Osisko Mining for an exploration earn-in and joint venture agreement.

Bonterra said the agreement covers its Urban-Barry property (host to the Gladiator and Barry deposits), in addition to the adjoining Duke and Lac Barry properties, all located in Québec’s Eeyou Istchee James Bay region.

The Duke property is currently 70% owned by Bonterra and 30% owned by Osisko, and the Lac Barry property is currently 85% owned by Bonterra and 15% owned by Gold Royalties Corp.

The company said that the earn-in and joint venture, which will be formalized by the parties executing a definitive exploration earn-in and joint venture agreement, will provide the terms for the advancement of the properties through a C$30 million investment by Osisko over a three-year period.

In its press release, Osisko said that under the binding letter agreement, the company has agreed to pay Bonterra an initial upfront payment of C$1 million in cash (payable within one business day of the signing of the binding letter agreement) and an additional C$4 million in cash upon the parties entering into the definitive agreement.

Under the exploration earn-in, Osisko has agreed to fund C$30 million in work expenditures over a three-year period to earn a 70% undivided interest in the properties, in accordance with annual work expenditures C$10 million in each year (which can be pre-paid at Osisko’s option).

After completion of the exploration earn-in, Osisko and Bonterra have agreed to form a joint venture entity or contractual joint venture. During the exploration earn-in and upon and following the formation of the joint venture, Osisko will be the operator of the properties.

Bonterra is a Canadian gold exploration company with a portfolio of exploration and mining assets including the Gladiator, Barry and Moroy deposits, Bachelor Mill and multiple highly prospective exploration prospects. Bonterra said it controls the only permitted gold mill in the region with a large land position of over 38,000 hectares in the Urban Barry Camp.

Osisko is a mineral exploration company focused on the acquisition, exploration, and development of precious metal resource properties in Canada. Osisko holds a 50% interest in the high-grade Windfall gold deposit located between Val-d’Or and Chibougamau in Québec and holds a 50% interest in a large area of claims in the surrounding Urban Barry area and nearby Quévillon area.