Otis Gold Corp.(CVE:OOO)(OTCQX:OGLDF) has provided an update to its shareholders Monday, saying it is in a "very good position" to weather the downward trend in junior financial markets, with the company continuing to engage in discussions with potential partners to fund its Kilgore project in Idaho.
"We are very mindful of the need to control costs, continue funding Kilgore and minimize any potential dilution to existing shareholders," said president and CEO of the Canadian junior exploration company, Craig Lindsay, in a statement released this morning.
"We remain very excited about Kilgore's development potential, and are working diligently to advance the project. Given that we own 100% of Kilgore, the project is subject to no underlying royalties, and property maintenance costs are only $36,000 per year for our entire property portfolio, we are in a very good position to weather the ongoing downturn in junior financial markets."
As part of its development plan, the company says it has submitted a plan of operations to the Caribou-Targhee National Forest to build around 1,550 metres of roads into the North Target area, located right next to the existing Kilgore gold deposit, and in an area that recently returned "strong drilling results" such as 121.9 metres of 1.04 grams per tonne (g/t) gold.
Once the permit is received, four roads will be constructed ahead of a planned drill program in the North Target area, where the company is looking to drill another 7,000 metres.
The property, which is equipped with existing power and water, is spread across 5,130 acres in southeastern Idaho, 60 miles north of Idaho Falls, and is accessible by road around 32 miles northeast of the town of Dubois and 15 miles east of Interstate Highway 15.
Otis has been in "wide-ranging" discussions with potential investors and strategic partners, it said, in connection with financing activities at the project, including drilling, environmental baseline studies, permitting and the start of a preliminary economic assessment report.
In light of the challenging state of capital markets in the junior mining sector, the company's management has implemented a number of cost-cutting measures, Otis said, to reduce its monthly cash burn, while at the same time dedicating enough resources for the continued development of Kilgore.
As a means to raise cash for Kilgore, the company decided to joint venture its Oakley project in Idaho with Lateral Gold Corp (CVE:LTG), allowing Lateral to earn up to a 100 per cent in the property over a 7.5 year period. Otis said Monday that the TSX-Venture Exchange has now approved the deal, with initial cash and share payments received.
"We are chasing lots of different opportunities right now from financings to developing relationships with producing mining companies, to joint ventures. It's a busy time for Otis," said CEO Lindsay in an interview with Proactive Investors in March.
"We're always looking quite aggressively at acquiring properties as well, with a regional focus on the western U.S. This is the time to be opportunistic, but we will need a strategic partner for this type of transaction."
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