The Duparquet Gold Project consists of several properties held in different entities which, in addition to the Beattie property, include the Donchester, Dumico and Central Duparquet properties
Map of the Duparquet Project (CNW Group/First Mining Gold Corp.)
First Mining Gold Corp. (“First Mining” or the “Company”) (TSX: FF) (OTCQX: FFMGF) (FRANKFURT: FMG) is pleased to announce that it has made an offer to acquire all of the issued and outstanding shares of Beattie Gold Mines Ltd. (“Beattie Gold”), a private company that owns the mineral rights to mining claims that make up the former Beattie mining concession which forms a large part of the Duparquet Gold Project (the “Duparquet Gold Project”) located in Quebec, Canada (the “Beattie Offer”). First Mining, directly and through its wholly-owned subsidiary, Clifton Star Resources Inc. (“Clifton Star), already owns approximately 25.3% of the issued and outstanding shares of Beattie Gold. The total consideration of the Beattie Offer is $4.43641 cash per Beattie Gold share and 35 First Mining Shares per Beattie Gold share for a total cash consideration of $6,227,176 and the issuance of 49,127,820 First Mining common shares. First Mining has received signed, irrevocable lock-up agreements from Beattie Gold shareholders holding, in aggregate, 1,358,652 Beattie Gold shares, representing 72.3% of the outstanding common shares of Beattie Gold. Upon acquiring the Beattie Gold shares committed under the lock-up agreements, First Mining, directly and through Clifton Star, will own 97.6% of the outstanding common shares of Beattie Gold.
The Duparquet Gold Project consists of several properties held in different entities which, in addition to the Beattie property, include the Donchester, Dumico and Central Duparquet properties. First Mining, through Clifton Star, is currently a 10% shareholder of 2588111 Manitoba Ltd (“258 Manitoba”), a private company that owns the mineral rights to mining claims that make up the former Donchester mining concession and Dumico property that also form a part of the Duparquet Gold Project, and a 10% shareholder of 2699681 Canada Ltd (“269 Canada”), a private company that owns in whole or in part, the surface rights to the Beattie, Donchester and Dumico properties. First Mining already owns 100% of the Central Duparquet property.
Concurrent with making the Beattie Offer, First Mining has entered into share purchase agreements to acquire all of the issued and outstanding shares of 258 Manitoba (the “258 Manitoba Transaction”) and 269 Canada (the “269 Canada Transaction”, and together with the 258 Transaction, the “Concurrent Transactions”) that are not already owned by Clifton Star. The Concurrent Transactions are conditional on the Beattie Offer, and will close on the same day as the Beattie Offer, which is expected to be in mid-September.
The total consideration of the Concurrent Transactions is $2.5 million in cash and the issuance of 20,000,000 common shares of First Mining. In aggregate, the total consideration of the Beattie Offer and the Concurrent Transactions (assuming that all shareholders of Beattie Gold tender their shares to the Beattie Offer) is $8,727,177 in cash and 69,127,820 common shares of First Mining. The total transaction value based on the twenty trading days volume weighted average price for First Mining’s common shares as of the last trading day prior to this news release is approximately $24 million.
“This transformational acquisition has been a few years in the making and grows First Mining’s M&I gold resources by 40% and inferred gold resources by 50%” said Keith Neumeyer, Chairman of First Mining Gold. “When First Mining acquired Clifton Star in 2016, we always contemplated the opportunity to consolidate this advanced stage, highly prospective project. Duparquet fits perfectly with First Mining’s strategy and the capabilities of our team to advance and de-risk a second world class asset.”
“This is a transformational acquisition for First Mining and the Duparquet Gold Project as we plan on consolidating this highly fragmented ownership structure under the First Mining banner. Duparquet hosts a robust resource profile where two past producing mines have operated in Quebec’s most prolific gold mining district. 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. We are confident that Duparquet and the district will prove to be a critical strategic asset in the gold sector in Canada as this transaction affirms First Mining’s positioning as a multi-asset developer of major projects in Tier 1 jurisdictions,” stated Dan Wilton, CEO of First Mining. “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. Springpole remains a core focus and priority as we continue to advance the project through feasibility and the environmental assessment process. The addition of Duparquet results in First Mining owning 100% of two projects with multi-million ounce gold resources in what we consider as the best mining jurisdictions in the world and will allow First Mining to leverage our team’s experience with similar projects in advancing these two major gold deposits.”
Transaction Details
First Mining intends to make an offer to all registered holders of common shares of Beattie Gold in accordance with applicable Canadian securities laws. The Beattie Offer will be subject to the following conditions: (i) there being deposited under the Beattie Offer, and not withdrawn, at least 464,643 of the outstanding common shares of Beattie Gold (the “Take-Up Condition”), which, when combined with the common shares of Beattie Gold already held by First Mining (both directly and through Clifton Star), would represent ownership of Beattie Gold of 50.1%; and (ii) completion of the 269 Canada Transaction.
First Mining has entered into binding share purchase agreements in respect of the 258 Manitoba Transaction and the 269 Canada Transaction, which are both subject to the Take-Up Condition and are expected to close concurrently with the closing of the Beattie Offer. All of the transactions are expected to close in mid-September 2022.
Upcoming Duparquet Work Plan
First Mining has concluded substantial due diligence on the Duparquet Gold Project to date, including understanding the existing mineral resource estimate and exploration potential at the Duparquet Gold Project and in the district. First Mining intends to complete an updated mineral resource estimate in accordance with NI 43-101 shortly after closing the Beattie Offer and Concurrent Transactions which will incorporate additional drilling from 2014 to 2020 not included in the previous mineral resource estimate.
First Mining will commence an environmental data collection exercise to update the environmental baseline data collected by Clifton Star in 2012 and 2013. Work is also expected to commence on engineering trade-off studies and an updated economic study to build on the solid technical foundation established by the Project in the 2014 Pre-Feasibility Study. First Mining has initiated discussions with the relevant Quebec ministries and is committed to working in partnership with regulators, the local municipality, and Indigenous communities to address environmental matters and legacy infrastructure as part of the property’s redevelopment. In addition, First Mining intends to commence a robust regional exploration data compilation, integration and targeting exercise to develop a path supporting potential resource expansion, resource classification upgrading, and exploration discovery.
Source: Company Press Release