"Given the substantial success of our ongoing drill programme in expanding mineralisation, increasing our property holdings is extremely important in providing significant exposure to potential upside both to the north and south of our current property," i-80's executive vice president Matt Gollat said.
The acquisition will increase the size of i-80's Granite Creek property package by about 1,280 acres, or 518 hectares, extending the company's exposure about 1.6 kilometres north towards Nevada Gold's Turquoise Ridge mine, and 1.6 kilometres south of Granite Creek along the Getchell/ Range Front fault structure.
i-80 noted that it provides a 100% interest in the potential northern extension of the South Pacific Zone.
Canaccord Genuity Capital Markets analyst Michael Fairbairn said that given "strong" drill results from the South Pacific Zone in recent months, the expanded land package could add longer-term value.
"We believe recent results from the SPZ lend support to the possibility of an accretive mine life extension at Granite, particularly due to the fact that the zone is located proximal to existing underground mine workings," he said.
Recent drill results have included a 16g/t intercept over 15.7 metres, he noted.
Total consideration for the purchase consists of a cash payment of US$4 million and the inclusion of the acquired sections into the existing 10% Net Profits Royalty that Nevada Gold currently holds on the existing property, i-80 said.
Barrick Gold will also retain a 0.5% NSR on the new property sections, it added. Nevada Gold is a joint venture between Barrick and Newmont.
On May 9, i-80's share price was quoted as C$3.15 (US$2.42), having fallen 6% day on day. The company has a market capitalisation of C$756.84 million.