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American Battery Metals Corp. (CSE: ABC) has entered into a non-binding letter of intent to acquire Bayshore Minerals Inc., a private exploration and development company that owns the Elk gold project located in south-central British Columbia.

The Elk project is host to an NI 43-101 compliant resource estimate comprising 442,600 ounces of gold in the measured and indicated categories as well as 88,000 ounces of gold in the inferred category.

The property is located within the Similkameen mining division and consists of 27 contiguous mineral claims and one mining lease covering 16,566 hectares.

Currently the Elk project has a ‘small mines’ permit under the care and maintenance provision, has bonding in place for an exploration permit, and an effluent discharge permit. Bayshore has been focused on reactivating and expanding the scope of the mine permit for a much larger operation.

“The Elk gold project is known as a high-grade gold gold deposit that has been the subject of significant expenditures including over 125,000 metres of drilling property wide, over 110,00 metres of which forms the basis confirming the project’s high-grade resource estimate,” Jeremy Poirier, president and CEO of American Battery Metals said in a media release.

“Given the extensive exploration and development to date, we see the potential for near-term production coincident with the recent macro events which supports an improving gold market.”

Under the terms of the LOI, American Battery Metals would issue approximately 27 million shares in exchange for all the issued and outstanding shares of Bayshore. Completion of the transaction is expected in the first quarter.

Shares of American Battery Metals surged by 16% on the CSE at midday Friday. The company’s market capitalization stands at C$10.81 million.