First Mining Gold Corp (TSE:FF) (OTCQX:FFMGF) (FRA:FMG) has closed the book on an earn-in agreement with Big Ridge Gold Corp (CVE:BRAU) (OTCMKTS:ALVLF) (FRA:3H8B) on its Hope Brook gold project in Newfoundland.
Finalizing the deal first announced in April, Big Ridge Gold can now earn up to an 80% stake in the project through a two-stage earn-in over five years by incurring a total of $20 million in qualifying expenditures and issuing up to 25 million Big Ridge shares.
Upon closing, First Mining received $500,000 in cash and 11.5 million shares from Big Ridge.
READ: First Mining Gold enters partnership to advance Hope Brook gold project
First Mining will retain a 1.5% net smelter returns (NSR) royalty on the project, of which 0.5% can be bought back by Big Ridge for $2 million.
The company also nominated its COO Ken Engquist to the board of directors of Big Ridge Gold.
Hope Brook boasts a high-grade underground resource of 5.5 million tons grading 4.77 grams per ton (g/t) gold for 844,000 ounces in the indicated category, and an additional 840,000 tons grading 4.11 g/t gold for 110,000 ounces of gold in the inferred. First Mining believes that the project has potential to become a high-grade underground producer in the Eastern Canadian province.
"We are extremely pleased with the addition of Big Ridge to our partnership portfolio and look forward to seeing the Big Ridge team unlock the value of our Hope Brook project and the surrounding highly prospective land package,” Dan Wilton, CEO of First Mining said in a statement.
"Hope Brook has one of the largest existing resource endowments in Newfoundland, which has become one of the hottest exploration jurisdictions on the planet.”
First Mining will retain “significant exposure” to Hope Brook through an initial 19% equity interest in Big Ridge, a retained 20% project interest in Hope Brook, milestone share and cash payments, and the NSR royalty, Wilton added.
“We are confident that the team at Big Ridge, with their deep development and operating experience, will unlock value for our shareholders through their $20 million investment in Hope Brook."
Contact Angela at angela@proactiveinvestors.com
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