Capricorn Metals Ltd (ASX: CMM) shares are having a tough start to the day.
In morning trade, the ASX gold stock is down a sizeable 6% to $9.08.
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Why is this ASX gold stock falling?
Investors have been selling Capricorn Metals shares today after broad weakness in the gold sector offset news of a new acquisition.
In respect to the former, investors have been selling down the gold price amid optimism over potential deals between the United States and its trading partners.
This has reduced safe haven demand and sent the S&P/ASX All Ordinaries Gold index crashing over 5% lower today.
What about the acquisition?
This morning, the ASX gold stock revealed that it is making an addition to its portfolio.
It has entered into a binding agreement with BPM Minerals Ltd (ASX: BPM) to acquire the prospective Claw Gold Project tenement package.
According to the release, the Claw Gold Project covers approximately 398 square kilometres of tenure located contiguous to the south of Capricorn's Mt Gibson Gold Project (MGGP) in the Murchison region of Western Australia.
The ASX gold stock notes that the Claw Gold Project is considered highly prospective for gold mineralisation. It features multiple settings conducive to hosting economic gold deposits.
Capricorn has already identified seven target zones for exploration within the project tenure. It points out that the highest priority target is immediately adjacent to MGGP's Sundance prospect, which has been shown to host shallow supergene gold mineralisation.
What is it costing?
The company may have got itself a bit of a bargain if the Claw Gold Project delivers the goods.
The release reveals that it has agreed to pay $1.5 million for the project. This comprises $1 million in cash and $500,000 in shares.
In addition, there are potential additional payments totalling $1.5 million. These are contingent on a mineral resource being declared in excess of 75,000 ounces and the commencement of a commercial mining operation.
Commenting on the deal, the ASX gold stock's executive chairman, Mark Clark, said:
The acquisition of the Claw Gold Project continues the expansion of Capricorn's Mt Gibson exploration footprint and adds highly prospective targets very close to the Company's current Mt Gibson resources. This provides Capricorn with an outstanding exploration opportunity with a view to adding meaningful additional ore sources to the Mt Gibson operation. We look forward to commencing active exploration on the project in 2025.
