August 18, 2022
Prospector Metals Corp. (TSXV:PPP, BUY (S), Taylor Combaluzier) announced it has executed a property option agreement with Newfoundland Discovery Corp. (CSE:NEWD, Not Rated). The agreement is comprised of two option milestones: 1) NEWD may earn an initial 50% interest in the Schefferville Au project in return for staged share payments to Prospector (totaling 9.9% of the fully diluted shares of NEWD) and $4M of work commitments by December 31, 2025, including $1.3M by the end of 2022; and 2) NEWD may earn a 100% interest by issuing 19.9% of its shares to Prospector and completing a total of $7.5M of work commitments by the end of 2026. We would note that the company completed a Phase 1 exploration program that ended in Jul/22, which included a detailed high-resolution aeromagnetic survey over the Sable claim as well as mapping, stripping and channel sampling at Arsene, Baleine Rouge and Wolf targets. Priority targets identified in the Phase 1 exploration program are planned to be drilled with up to 3,500m of diamond drilling during the Phase 2 program scheduled to begin in Sep/22, for which NEWD would be committing a minimum of $1.3M. Importantly, Prospector would remain the operator of the project and undertake all exploration and development programs on the project and is entitled to a 5% management fee on all expenditures. Overall, we view this agreement positively as it allows another one of Prospector’s projects to be drill tested in 2022 (along with Toogood, Savant Lake and Whitton Lake) and should add additional news flow for the company through H2/22 and into 2023. This transaction also fits the company’s strategy of taking a cost-effective approach to exploration to quickly evaluate the geological potential of a given project and potentially make a discovery (see our initiation report). Read more
