Hope Brook gold project is a past-producing gold operation discovered in 1983
First Mining Gold has reached an agreement with Big Ridge Gold, allowing the latter earn up to 80% interest in its Hope Brook gold project, located in Newfoundland, Canada.
Under the terms of the earn-in agreement, Big Ridge is eligible to earn 80% interest in the project through a two-stage earn-in over five years.
In the five years, the company will have to spend a total of $20m in qualifying expenditures, and issue up to 36.5 million shares of Big Ridge to First Mining, along with the cash payment.
First Mining would retain 1.5% net smelter returns (NSR) royalty on the project, of which 0.5% can be bought back by Big Ridge for $2m.
First Mining CEO Dan Wilton said: “We are extremely pleased to announce this partnership to advance our Hope Brook project, located in one of the most exciting exploration regions in the gold industry today.
“The team at Big Ridge brings a unique combination of complementary experiences and skill sets to Hope Brook, including a strong understanding of the operating environment in Newfoundland, robust exploration, development and operational expertise, and deep capital markets experience and relationships.
“We are excited to work with Big Ridge as they unlock value in Hope Brook and the surrounding highly prospective land package.”
The Hope Brook gold project is a past-producing gold operation, discovered in 1983 by BP-Selco. It was the first major gold producer in Newfoundland.
The site has produced more than 752,000oz of gold from 1987 to 1997, and along with a copper concentrate from 1993 till 1997.
Hope Brook has significant infrastructure originally used to support previous mining activities, including a transmission line with functional power supply, roads, tailings ponds, camp facilities and a gravel airstrip.
Furthermore, the property comprises 1,066 claims covering more than 26,000ha held under six licenses, said the company.
Wilton added: “We believe this Transaction will further demonstrate the tangible value in our portfolio of assets and will allow First Mining to continue to focus on de-risking, enhancing and advancing our flagship Springpole Gold Project in Ontario.
“First Mining shareholders will retain significant exposure to Hope Brook through an initial 19% equity stake in Big Ridge, a retained 20% project interest at Hope Brook, milestone share and cash payments and an NSR royalty on the Project.”