GFG Resources has entered a binding letter of intent (LOI) with Patriot Gold Vault for the sale of its Rattlesnake Hills Gold Project.

The agreement, which is due to be finalised within 45 days, will see Patriot paying GFG an aggregate consideration of around C$3.3m.

The terms of the LOI include an initial cash payment of C$250,000 upon signing and an equal amount upon the execution of a definitive agreement.

At the transaction's closure, Patriot will pay GFG C$1.2m in cash and issue shares worth at least $600,000, or three million common shares, depending on Patriot's listing status and share price.

Patriot is also set to replace the existing $219,000 reclamation bond for the project, which GFG will reclaim.

Besides, if the National Instrument 43-101 resource estimate reveals a mineral resource exceeding 3,000,000oz of gold, Patriot will pay GFG an additional C$1/oz in cash or shares.

GFG will be reimbursed by Patriot for all costs and expenses incurred from the date of the LOI to the closing date, up to $228,000.

The transaction is expected to close approximately 120 days after the signing of the definitive agreement.

The Rattlesnake Hills Gold Project in central Wyoming is a significant gold exploration project.

It lies within a belt of alkalic intrusive complexes associated with gold deposits, stretching from Montana to New Mexico.

Patriot co-founder Mario Vetro said: “Patriot Gold Vault is proud to announce the agreement for the purchase of the Rattlesnake Hills Gold Project as our launch asset. Patriot was created to offer leverage to the next gold cycle by creating a liquid, public gold aggregator.

“Patriot will focus on acquiring resource-ready projects in Tier 1 jurisdictions and drilling them aggressively with the lens of a new gold price paradigm. Much like the Detour and Malartic gold mines, we believe that past producers and historical resources are often constrained by capital and lack of drilling not geology.

“Despite a robust gold price backdrop, pre-production gold inventories are trading at cycle low multiples, and this is our opportunity.”