O3 Mining Inc (CVE:OIII) (OTCMKTS:OQMGF) reported that it has agreed to sell its wholly-owned Northern Gold Mining subsidiary to Moneta Porcupine Mines Inc (TSE:ME) (OTCMKTS:MPUCF) (FRA:MOP) in exchange for 149,507,273 Moneta common shares, which would give O3 Mining a 30.1% ownership interest in Moneta Porcupine.
Northern Gold Mining owns 100% of the Golden Bear assets, including the Garrison gold project in the Kirkland Lake district of Ontario’s Timmins gold mining camp, which is adjacent to Moneta Porcupine’s Golden Highway Project.
By combining assets in the Timmins gold camp, Moneta Porcupine will have an estimated Indicated resource of 4.0 million gold ounces along with 4.4 million Inferred ounces of gold.
“O3 Mining is pleased to unlock value for our shareholders through our investment in, and ongoing support of, our new partner, Moneta. This transaction will allow O3 Mining to partner in the future development of a large and long-life gold project situated in one of the world's most famous gold-producing districts through the consolidation of these two projects and their respective land positions,” O3 Mining CEO José Vizquerra said in a statement.
READ: O3 Mining exploiting world-class district in bid to become premier, multi-million ounce gold firm
He added: “We look forward to partnering with Moneta's management team, through our board representation and in our role as Moneta's largest shareholder, and being part of its growth story. O3 Mining aims to be a supportive partner to Moneta as it advances the Garrison and Golden Highway Projects through the formation of a joint technical committee, board representation, and its ability to participate in future financings to maintain its pro-rata ownership position.”
Moneta Porcupine Mines CEO Gary O'Connor also weighed in on the agreement, stating: “The partnership with O3 Mining through the acquisition of the Golden Bear assets will transform Moneta into one of the largest gold development companies in North America with a significant resource and landholding in Canada's most prolific gold mining camp. The Golden Bear assets, including the Garrison Gold deposits, are adjacent to our flagship Golden Highway project and provide significant synergies and multiple options for the development of our gold deposits.”
O3 Mining noted that selling its Northern Gold Mining subsidiary will allow it to focus on advancing its core assets, the Marban and Alpha gold properties in Québec, while maintaining exposure to the development potential of the Garrison Project.
The company added that it is currently working to expand its gold mineralization at Marban and Alpha through an extensive 150,000-metre drilling campaign involving 12 drilling rigs.
Terms of the deal
The partnership between 03 Mining and Moneta under an investor rights agreement, includes the formation of a joint technical committee, the right of O3 to nominate two directors for election to Moneta's board of directors, and the right to participate in future financings to maintain its pro-rata ownership position.
Under the deal, O3 Mining and Moneta will enter into an investor rights agreement, whereby Moneta's board will be reconstituted to consist of eight individuals, with O3 Mining entitled to nominate two directors and one newly appointed independent director to be agreed upon by the parties.
The Investor Rights Agreement includes, among other things, pre-emptive and top-up rights in favour of O3 Mining, a 24-month standstill provision in favour of Moneta, and certain other restrictions in respect of O3 Mining’s dealings in Moneta shares, including a prohibition from selling the shares until December 31, 2022.
Moneta's directors who collectively hold about 16.5% of the outstanding Moneta shares have agreed to vote in favour of the deal, subject to certain exceptions.
Contact Sean at sean@proactiveinvestors.com