First Mining Gold Corp. (TSX:FF, OTCQX:FFMGF) reported that partner Big Ridge Gold Corp. (TSX-V:BRAU, OTCQB:ALVLF) has now earned a 51% stake in the advanced Hope Brook project in Newfoundland having completed the first stage of an earn-in deal inked last year.
Big Ridge has spent C$10 million in exploration at the asset, issued 15 million of its shares to First Mining and granted it a 1.5% net smelter returns (NSR) royalty on Hope Brook, of which 0.5% can be bought back for C$2 million.
"Our partnership with Big Ridge has surfaced significant value for First Mining's shareholders and continues to highlight the potential value for the Hope Brook deposit," said Dan Wilton, CEO of First Mining in a statement.
"Our team remains encouraged and eagerly awaits results from Big Ridge's ongoing Phase 1 drill program."
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Mike Bandrowski, CEO of Big Ridge, added: "The promising results from our Phase 1 drill program have motivated the Big Ridge team to continue to advance the Hope Brook Project and highlight that it is a much larger, high-grade deposit in a Tier-1 location."
So far, Big Ridge has completed 61 diamond drill holes and released results from 33 in a Phase 1 program, which was focused on connecting the Main Zone and the 240 Zone near surface and at depth and testing the down dip extensions to both Zones.
Results will be included in the updated mineral resource estimate that Big Ridge expects to release in the first half of 2023.
Hope Brook sits 85 kilometres east of Port aux Basques and has well maintained infrastructure, including an operational 28 person camp, an 1,100-meter airstrip and a connection to the electricity grid. It produced 752,162 ounces of gold between 1987 and 1997.
It hosts an NI 43-101 indicated gold resource of 844,0000 ounces grading 4.77 grams per tonne (g/t) and inferred resource of 110,000 ounces for 4.11 g/t gold based on a 3 g/t cut-off grade and a long-term gold price of US$1,200 per ounce.
Big Ridge now has until June 8, 2026 to acquire an additional 29% direct interest in Hope Brook via a second stage earn-in. It must spend another C$10 million on exploration, issue shares that is the lesser of (a) 10 million Big Ridge shares, or the number of Big Ridge Shares which, when combined with the number of Big Ridge Shares owned by First Mining at the time of issue, would result in First Mining owning 19.9% of Big Ridge.
Upon completion of this second stage, First Mining would then hold a 20% interest in Hope Brook which will be free carried until the completion of a feasibility study by Big Ridge, the company noted.
First Mining is a gold developer advancing a portfolio of projects in Canada, with the most advanced being its Springpole asset in northwestern Ontario, which is one of the largest undeveloped gold projects in Canada.
Contact the author at giles@proactiveinvestors.com