Mosquito Consolidated Gold Mines to option 100% of BlackPoint property to UraStar

Mosquito Consolidated Gold Mines (CVE:MSQ) announced Friday it signed a letter of intent to sell its full interest in the BlackPoint gold-silver property in Nevada to UraStar Energy (CVE:URS) in a cash-and-share deal.
Under the terms of the agreement, UraStar may earn a 100% interest in the property by making cash and share payments to Mosquito over a five year period, beginning with $25,000 in cash at the signing of the agreement and, at closing, $225,000 in cash and 250,000 shares.
The transaction will see UraStar pay a total of $10 million in cash and 1.5 million common shares, bring the deal to a total valuation of $10.75 million, based on UraStar's July 14 closing price of $0.50 per share.
The property consists of 896 acres and is located seven kilometres north of Eureka, Nevada. Surrounding the BlackPoint gold mine are several other gold deposits, including the active Ruby Hill Gold Mine to the southwest, and the historic Alligator Ridge Gold Mine to the east.
BlackPoint is a formerly producing mine, with work dating back to the 1930s. Assays from a 1971 program at the site returned several high-grade silver deposits, including 91.44 metres in the Condor zone grading 82.63 grams per tonne (g/t) silver  from hole SL-18.
The Dot zone returned assays of 395.32 g/t silver over 41.45 metres in hole ER-9, while hole ER-11 returned 30.48 metres grading 138.52 g/t silver, including 15.24 metres grading 243.43 g/t silver.
Mosquito said that, while gold, copper, lead, and zinc mineralization have been described at the mine, no such assays were reported.
The Vancouver, B.C.-based company also said that, based on the geological work it completed on the site in 2007, it believes that this property was not properly explored resulting in the failure of previous drill programs to identify main exploration targets beneath the exposed silica breccia zone.
UraStar, whose stock on the TSX Venture Exchange was up 4%, trading at $0.52 per share as of 9:35 am EDT, said it will begin an aggressive exploration program of detailed surface mapping, sampling, and drilling to define and test the unexplored exploration targets.
Mosquito's stock was up 3.7%, trading at $0.84 per share.