Otis Gold has signed a definitive option agreement with Centerra Gold whereby Centerra may earn up to a 70% interest in Otis’s Oakley project in Cassia county, southern Idaho. Terms of the agreement call for Centerra to spend $7 million on exploration and make cash payments to Otis of $550,000 over a six-year period.
Centerra can earn a 51% interest in the Oakley project by incurring $4.5 million in exploration expenditures and making cash payments of $250,000 to Otis over a three-year period. Centerra will then have an option to acquire a further 19% of the project by incurring an additional $3 million in exploration expenditures and making a cash payment of $300,000 over three years.
The Oakley project hosts gold-silver epithermal hot spring-type mineralization at Blue Hill Creek and Cold Creek and detachment-related gold-silver mineralization at Matrix Creek. Blue Hill Creek has an inferred resource of 163,000 ounces (oz) of gold in 9.97 million metric tons (mt) at a grade of 0.51 grams/mt gold. The Blue Hill Creek resource is hosted in rocks of the Tertiary Salt Lake formation within a northwest-trending Tertiary graben that is part of a north-trending, five-mile-long by one-mile-wide zone of low-sulphidation, hot spring-type gold occurrences along the western margin of the Albion mountains.