Discovery Alaska signs a mining lease agreement gold project in the US state of Alaska

Discovery Alaska, the Australian mineral exploration company, has signed a binding mining lease agreement with Doyon for its Vinasale gold project in the US state of Alaska.  

Discovery has secured a lease covering approximately 6,500 hectares, marking a pivotal moment in its expansion strategy.

Under this agreement, Discovery Alaska obtains exclusive rights for mineral exploration, development, and marketing within the Vinasale project region.

This lease lasts for an initial period of 15 years, with the potential for a five-year extension contingent upon the completion of a feasibility study and the company’s compliance with its terms.

Situated 310km away from Anchorage and 26km from McGrath, the Vinasale project is situated on land owned by Doyon, an Alaska Native Regional Corporation.

The project’s resources are estimated at 22 million tons with a grade of 1.53g/t, equivalent to 1.08 million ounces of gold for inferred resources, and 2.29 million tons with a grade of 1.84g/t, equating to 135,000 ounces of gold for indicated resources.

To prepare for a comprehensive exploration and development initiative, the company plans to conduct exploration planning activities. The mineralization within the project spans 400 meters and remains open towards the south and at deeper levels.

Doyon will receive a signing payment of $15,000 (A$22,429). Furthermore, lease payments are structured as follows: $40,000 annually from 2025 to 2027, $70,000 from 2028 to 2033, and $225,000 from 2034 onward. If the company opts for a lease extension, the annual payment will rise to US$300,000 post that decision.

Upon completing a feasibility study, Discovery Alaska will pay Doyon $200,000, and an additional $600,000 upon receiving approval for mining operations.

The company’s obligatory expenses will vary, starting at $40,000 in 2024 and escalating to $1.5 million annually post-2035, prior to the onset of commercial production.

Doyon is entitled to a net smelter returns (NSR) royalty on mineral outputs. For the first four years of production, Doyon will collect a 1.5% NSR from base minerals. Subsequently, from the fourth to eighth year, the NSR will increase to 3%. Beyond the eighth year, an NSR exceeding 3.5% or 15% of net proceeds from base minerals will be disbursed.

Discovery Alaska retains the flexibility to terminate the lease by providing written notification to Doyon.

Jerko Zuvela, Director of Discovery Alaska, expressed enthusiasm about advancing the project in a top-tier location. He stated, “This venture presents a remarkable opportunity to develop an advanced gold project during a favorable period for the gold industry, characterized by peak prices and located within a renowned gold district.