Select Sands Corp. and Comstock Metals Ltd. announced that they have entered into a letter of intent in respect of a proposed purchase by Comstock of Select Sands’ Preview SW gold project located in the La Ronge district of Saskatchewan and Select Sands’ early-stage Old Cabin property in Ontario.
Under the terms of the letter of intent Comstock would acquire the assets for 20 million post-consolidation common shares in the capital of Comstock and the assumption of certain liabilities associated with the assets.
“We believe that this acquisition will be accretive to Comstock and will diversify its asset base within mining-friendly Canadian jurisdictions. The Preview SW gold project has excellent potential for resource expansion and further discoveries” commented Comstock President and CEO David Terry.
The Preview SW gold project is located 40 km north of La Ronge, Saskatchewan and 80 km southwest of Claude Resources Inc. Seabee gold mine; Claude is currently being acquired by Silver Standard Resources Inc. in a deal valued at $400 million. The Preview SW project database contains results from 162 core holes, totaling 26,250 m, drilled between 1985 and 2013. Of these, 136 were drilled on the main Preview SW deposit and form the basis for a NI 43-101 Compliant Resource 96 g/t Au over 5.66 m starting at 19-m below surface.
The completion of the transaction is subject to a number of conditions including completion of due diligence, negotiation and execution of definitive documentation, receipt of all necessary regulatory approvals (including the approval of the TSX Venture Exchange), receipt of required shareholder approvals and the receipt of fairness opinions which are acceptable to the board of directors of each of Comstock and Select Sands.