Majestic Gold Corporation subsidiary Majestic China Holdings Corp has entered into a non-binding Letter of Intent (LoI) with Yantai Baiheng Gold Mining Co Ltd to acquire the Shuang Shan Tun and Xia Yu Cun properties in the Muping-Rushan Gold Belt in Shandong Province, China.
Majestic announced the LoI on August 12, 2015, stating that Majestic China has the option to enter into a definitive agreement for one or both of the properties. During the 12 month due diligence period, Majestic China will also hold the right of first refusal over any third party proposal similar in nature to those being contemplated.
Shuang Shan Tun and Xia Yu Cun are both small tonnage, medium-high grade underground gold projects that have been developed as small-scale producers. Majestic China intends to determine the economic viability of larger scale development of either property on a joint venture basis.
Completion of the joint venture is subject to the completion of due diligence on exploration and development work completed on the properties to date, completion of a scoping study-level evaluation of the properties, as well as the approval of the TSX Venture Exchange and all other required regulatory, corporate and security holder approvals. During the due diligence period and prior to entering into a definitive agreement with Baiheng, Majestic China does not have any obligations to Baiheng.
Majestic Gold is a Canada-based company engaged in commercial gold production at the Songjiagou Gold Project in eastern Shandong Province.
Majestic’s operating subsidiary Yantai Zhongjia Mining Co Ltd has received final government approval to expand its mining licence at the Songjiagou project from 0.342sqkm to 0.594sqkm. In advance of this, work at Songjiagou has included development of a second access road into the pit to enable increased haulage of waste to two new waste dump areas that have been acquired in close proximity to the pit.