First Mining Gold Corp. (TSX:FF, OTCQX:FFMGF) revealed that it has offered to buy private firm Beattie Gold Mines Ltd and is set to make other acquisitions, in total deals worth around C$24 million, which will consolidate one of the largest advanced, undeveloped gold projects in Canada and create a multi-million-ounce district.
The company has made an offer to buy Beattie, in which it already owns a 25% stake, and which owns the former Beattie mining concession that forms a large part of the Duparquet gold project in Quebec, Canada.
Concurrent with the Beattie offer, First Mining has struck share purchase deals to buy 258 Manitoba and 269 Canada, which it does not already own. These deals are conditional on the Beattie offer, and will close on the same day, which is expected to be in mid-September this year.
The total consideration of the Beattie offer is $4.43641 cash per Beattie Gold share and 35 First Mining shares per Beattie Gold share and the total consideration of the concurrent transactions is C$2.5 million in cash and the issue of 20 million First Mining shares.
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The total transaction value based on the 20 trading days volume weighted average price for First Mining shares as of the last trading day prior to this announcement is about C$24 million, the company said.
Keith Neumeyer, chairman of First Mining Gold, said the deal had "been a few years in the making" and grew the company's measured and indicated (M&I) gold resources by 40% and inferred gold resources by 50%.
CEO Dan Wilton described it as "transformational" for First Mining and the Duparquet project. "Duparquet hosts a robust resource profile where two past producing mines have operated in Quebec's most prolific gold mining district," he said.
"First Mining has been a long-time minority shareholder of the companies that own this project, and the timing was right to acquire full ownership of these companies. Together with our ownership of the Pitt and Duquesne projects in Quebec located just east of Duparquet, First Mining will now have 100% ownership exposure to 3.3 million M&I ounces of gold and 2.0 million inferred ounces of gold located in the Abitibi, which is home to some of the largest and richest mineral deposits in the world. First Mining has completed extensive due diligence and will develop a comprehensive plan to advance the Duparquet gold project in the near-term," Wilton added.
Wilton confirmed that the Springpole project remained the company's core focus as it continued to advance the asset through feasibility and the environmental assessment process.
First Mining also noted that it has received signed, irrevocable lock-up agreements from Beattie Gold shareholders with over 1.358 million Beattie Gold shares in total, representing 72.3% of the outstanding shares.
Upon acquiring the Beattie Gold shares committed under the lock-up agreements, First Mining, directly and through its subsidiary Clifton Star, will own 97.6% of the outstanding shares of Beattie Gold.
Gold was first discovered in the Duparquet region in 1910, with production commencing in 1933 at Beattie and at Donchester in the 1940s.
The Duparquet asset sits immediately north of the town of Duparquet and covers 1,079 hectares, and consists of 50 mining claims, including two historical mining concessions, which include the four mining properties: the Beattie property (historical mining concession 292) owned by Beattie, the Donchester property (historical mining concession 384) and Dumico property owned by 2588111 Manitoba Ltd., and the Central Duparquet property owned by First Mining.
An NI 43-101 resource estimate of the Duparquet gold project from 2014 shows 3.1 million ounces (Moz) in the M&I category at 1.59 grams per ton (g/t) gold and 1.4 Moz of inferred at 1.51 g/t of the yellow metal.
First Mining is a Canadian gold developer focused on advancing its Springpole gold project in northwestern Ontario.
Contact the author at giles@proactiveinvestors.com