First Mining Gold Corp said it has entered into an earn-in agreement with Pelangio Exploration Inc. that consolidates its property holding in the Birch-Uchi Greenstone Belt in northwestern Ontario.
Under the agreement, reached through its wholly-owned subsidiary Gold Canyon Resources Inc., First Mining may earn up to an 80% interest in Pelangio's Birch Lake and Birch Lake West properties over two stages spanning six years.
The Birch Lake properties, covering approximately 3,700 hectares, include the High Grade Island prospect, which is located to the northeast of First Mining's Springpole Gold Project. With the addition of the properties, the company now controls close to 70,000 hectares in the Birch-Uchi Greenstone Belt.
READ: First Mining Gold says it has entered into an earn-in agreement with ALX Resources; acquires additional claims in Birch-Uchi
"We are extremely excited to continue our consolidation efforts in the region by bringing in the High Grade Island prospect, as it represents one of the most prospective areas in the Birch-Uchi Greenstone Belt," CEO Dan Wilton said in a statement.
"Despite being explored since the 1980s and with demonstrated high-grade drill intersections of up to 245 grams per ton (g/t) gold, High Grade Island has been underexplored relative to other high-grade camps in the belt and will be a priority target for us as we embark on our first broader regional exploration program next year.”
Through several land consolidation transactions over the last few months, First Mining said it now holds some of the most prospective areas of the Birch-Uchi Greenstone Belt. With future exploration success, it said these new targets have the potential to significantly increase the grade profile, resource potential and economics at its Springpole Gold Project.
Under the terms of the deal, First Mining will have a two-stage option to earn up to an 80% interest in the Birch Lake properties.
In the first stage, it can earn up to an initial 51% interest over four years by making cash payments to Pelangio totaling $350,000, issuing a total of 1,300,000 First Mining shares, and by incurring at least $1,750,000 worth of expenditures on the Birch Lake properties during the four years.
Upon completing the first stage of the earn-in, First Mining will have a second-stage option for two years to acquire an additional 29% interest in the properties by paying $400,000 to Pelangio in cash or First Mining shares, and by incurring an additional $1,750,000 worth of expenditures on the properties.
Upon completion of the second earn-in stage, First Mining and Pelangio will enter into a joint venture agreement for the Birch Lake properties where First Mining will hold, through Gold Canyon, an 80% interest in the Birch Lake Properties.
Contact the author at stephen.gunnion@proactiveinvestors.com