Lexington expands exploration rights at Jones-Keystone-Loflin

The AIM-traded firm said it had entered into three additional mining lease-with-option to purchase agreements on the south-western, or Loflin, side of the JKL Project.

It said the agreements were signed with certain landowners for an additional 129 acres of mineral exploration rights, and a further 22 acres of surface rights, increasing its mineral exploration rights at Loflin to 179.66 acres from 50.66 acres, taking its total project acreage to around 1,675 acres.

The agreements were each valid for six years, the board said.

Lexington explained that mineral rights in both North and South Carolina are owned by the title holder of the relevant land.

The terms of the three additional lease-with-option to purchase agreements mean the company would be required to pay annual rents, and could choose to purchase the surface and mineral rights at any stage during the six year period for exercise prices calculated by a predetermined mechanism, and payment of a 2% net smelter royalty in perpetuity over any future minerals, including gold, extracted from the properties.

“The company's phase one drilling campaign at Loflin is progressing well and we are very encouraged by the visible observations, including sulphide rich zones, that are present in the core samples to date,” said chief executive officer Bernard Olivier.

“Accordingly, we are delighted to have secured significant additional ground adjacent to our current mineral exploration rights, thereby enhancing our existing land package at Loflin.”

Olivier said the continued positive economic environment for gold was also encouraging, as it continued to trade at near five-year highs.

“Given the effect that the Covid-19 pandemic has had on global economies, we believe that the gold market will remain strong for some time as it continues to appeal to investors as a store of value and hedge against inflation.”

At 1138 GMT, shares in Lexington Gold were down 4.23% at 3.4p.