Panther Metals PLC (LSE:PALM) said it agreed to sell 128 mining claims, known as the Big Bear gold project, in Canada to Fulcrum Metals Ltd, which is seeking an initial public offering (IPO) on London’s Alternative Investment Market (AIM).
Panther will take a 20% stake in Fulcrum after its IPO and receive £200,000 and a 2% net smelter return royalty as consideration for the project.
"As a private company Fulcrum Metals, backed by an experienced and capable technical team, has already built a powerful and diverse portfolio of eight assets, covering precious, base and energy metals opportunities, in northern Ontario and Saskatchewan,” said Panther Metals chief executive Darren Hazelwood.
“The planned AIM IPO will provide Fulcrum with the necessary capital to hit the ground running and I'm incredibly excited that as a significant shareholder Panther Metals will be part of Fulcrum's journey.”
The disposal agreement is subject to Fulcrum being admitted to AIM before October 31.
The deal will give Panther indirect exposure to early-stage gold and base metal exploration over a further four properties on the Schreiber-Hemlo Greenstone Belt, where the Big Bear project is located, an additional two properties on the Dayohessarah Lake Greenstone and the Michipicoten Greenstone Belt, and diversify its commodity exposure through Fulcrum's two uranium exploration properties in Saskatchewan.
“At Panther we have a huge amount of faith in Big Bear and this deal supplements our existing interests in the Schreiber-Hemlo Greenstone Belt, through a listed structure at no extra capital cost to the business,” said Hazelwood.
“This deal will provide investment further upside to Panther whilst allowing the company to take advantage of other exciting opportunities elsewhere in Ontario.
“I believe we are on the cusp of an exploration boom driven by global demand and the need to secure critical mineral supply from politically stable and ethical jurisdictions,” he added.
Shear Gold project
Elsewhere in Canada, Panther announced in a separate statement that it had entered into an option to buy the Shear Gold project on the Eagle-Manitou Lakes Greenstone Belt.
The project covers about 98km2 and is located within the gold-endowed Kenora mining district.
"The gold potential of the Manitou Lakes area and the wider Kenora mining district of Ontario has been on Panther's radar for some time,” said Hazelwood.
“The opportunity to take a substantial new stake in this exciting belt has greatly enhanced the company's exploration portfolio and widened our exposure to potential gold and base metal discoveries.”
Panther has paid C$11,325 (£6,890) in cash to Shear Gold Exploration Corp to secure an option and sale and purchase agreement, under which Panther has committed to a minimum spend on the project and a 2% net smelter return royalty.
Panther said it can choose to buy the project anytime by paying C$250,000 to Shear Gold.
-- Adds Shear Gold option agreement --