First Mining Gold Corp (TSE:FF) (OTCQX:FFMGF) (FRA:FMG) has reported that its partner Auteco Minerals Ltd (ASX:AUT) has fulfilled the first stage of an earn-in agreement for the Pickle Crow Gold project in northwestern Ontario.
The definitive earn-in agreement penned in March 2020, gives Auteco the opportunity to earn up to an 80% interest in First Mining’s wholly-owned subsidiary PC Gold Inc, the company in control of Pickle Crow.
As part of the stage one process Auteco has issued 100 million shares of Auteco to First Mining. Auteco now holds a 51% interest in PC Gold.
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"First Mining is delighted by the excellent progress Auteco has made on Pickle Crow in such a short period of time,” Dan Wilton, CEO of First Mining said in a statement. "With this latest issuance of shares, First Mining now owns 125 mln shares of Auteco with an approximate fair value of $10.5 million.”
Ray Shorrocks, executive chairman at Auteco also offered comments.
"We have completed the Stage 1 earn-in requirements for a 51% stake in the Pickle Crow project, and it is a testament to the dedication of our team that we have achieved this within the first year of taking management responsibility for the project," Shorrocks said. "We are continuing to drill flat out, with several rigs targeting areas of known, high-grade mineralization to bring them into the resource, with mineralization open in all directions.”
For stage two of the earn-in process Auteco must complete an additional $5 mln exploration expenditure, then pay First Mining $1 million in cash within 90 days.
Part of stage two will also see Auteco grant First Mining a 2% net smelter return royalty on Pickle Crow, 1% of which can be bought back by Auteco paying US$2.5 million to First Mining.
Once stage two is fulfilled Auteco can acquire another 10% of PC Gold for $3 million payable to First Mining.
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