The seller, Agnico Eagle will be paid $45m and a stake in Barsele Minerals
Barsele Minerals signs LOI to acquire the remaining 55% stake in the Barsele gold project from Agnico Eagle. (Credit: Free-Photos from Pixabay)
Canada-based Barsele Minerals is set to take full ownership of the Barsele gold project in Sweden by acquiring the remaining 55% stake from Agnico Eagle in a cash-cum-stock deal.
In this regard, the parties have executed a non-binding letter of intent (LOI).
The consideration primarily includes $45m in cash and the issuance of a stake of 14.9% to Agnico Eagle in Barsele Minerals. This would make Agnico Eagle the largest shareholder of Barsele Minerals.
Besides, Agnico Eagle will be issued warrants exercisable into 6,000,000 common shares of Barsele Minerals and a 2% net smelter return royalty on all minerals extracted from the Barsele Project.
The company will also gain a contingent value right pertaining to future gold mineral reserves and mineral resources identified at the project.
Barsele Minerals president, CEO, and director Gary Cope said: “The opportunity to acquire a 100% controlling interest in the Barsele Project represents a tremendous milestone for Barsele.
“We plan to significantly increase the drilling activity on the project with the goal of growing the current mineral resource estimates.
“We are excited to start a new chapter in the development of the Barsele Project and are thankful to our joint venture partner Agnico Eagle for the work we have completed together.”
The Barsele gold project is located nearly 600km north of Stockholm in the Västerbottens Län district in northern Sweden. The exploration-stage project is also said to potentially host polymetallic VMS deposits.
Currently, it consists of one block of 23 granted exploration permits and also two exploitation concessions.
Agnico Eagle CEO Sean Boyd said: “We see Barsele’s consolidation of the Barsele Project as a positive outcome for all stakeholders.
“The monetisation of our interest in the Barsele Project will allow Agnico Eagle to focus on the most advanced projects in our exploration and development pipeline, while retaining an interest in the Barsele Project as a significant equity investor and royalty holder.”
The LOI signed by the parties will enable them to negotiate and sign a definitive purchase and sale agreement that will have customary terms and conditions for a deal of its nature.
The companies have set an exclusivity period that will end on 30 July 2021, with a view to signing the definitive agreement by such date. However, the exclusivity period can be extended for 31 more days in certain circumstances, said Barsele Minerals.