First Mining partners with Big Ridge on Newfoundland gold project
Developer First Mining Gold (TSXV: FF) has entered into a definitive agreement with Big Ridge Gold (TSXV: BRAU), allowing the explorer to earn up to an 80% stake in the past-producing Hope Brook gold project in southwestern Newfoundland.
Big Ridge may earn up to 80% in Hope Brook through a two-stage, five-year earn-in that calls for a total of C$20 million in spending on the project, the issue of 36.5 million of its shares to the vendor and a C$2-million payment to First Mining at the start of commercial production. First Mining would keep a 1.5% net smelter return (NSR) royalty on the property and have its interest carried for free through to a feasibility study.
As long as First Mining holds at least a 10% stake in Big Ridge, it would be allowed one nominee on the junior’s board; the developer will have the right to nominate a member to the board on closing.
Hope Brook generated 752,000 gold oz. between 1987 and 1997
If Big Ridge completes the earn-in, First Mining would hold a 20% share in Hope Brook, in addition to its 19% initial equity stake in Big Ridge, the NSR and the share and cash payments above.
The transaction is expected to close in the second quarter.
“The team at Big Ridge brings a unique combination of complementary experiences and skill sets to Hope Brook, including a strong understanding of the operating environment in Newfoundland, robust exploration, development and operational expertise, and deep capital markets experience and relationships,” Dan Wilton, First Mining CEO, said in a release.
Hope Brook generated 752,000 gold oz. between 1987 and 1997, as well as a copper concentrate between 1993 and 1997. The site includes infrastructure such as a transmission line, roads, tailings ponds, camp facilities and an airstrip.
Resources at the site include 5.5 million indicated tonnes at 4.77 g/t gold that contain 844,000 gold oz. and 836,000 inferred tonnes grading 4.11 g/t gold, for a further 110,000 oz.
Wilton added that with this latest announcement, First Mining plans to focus on advancing its Springpole gold project in Ontario. In March, the developer signed a joint venture agreement with Auteco Minerals (ASX: AUT), with the Australia-based company planning to earn a 51% stake in the past-producing Pickle Crow project, also in Ontario.
In addition to the 1.5% NSR on Hope Brook, First Mining’s royalty portfolio includes a 1.5% NSR on Treasury Metals’ (TSX: TML) Goldlund project in Ontario and a 2% NSR on Pickle Crow.
Big Ridge is an exploration and development company with existing projects in Quebec, Manitoba and Ontario. Management includes Michael Bandrowski in the president and CEO role.
(This article first appeared in the Canadian Mining Journal)