The property was acquired by Monarch from Hecla Quebec and Typhoon Exploration in August last year
Monarch plans to use the sale proceeds to advance its Wasamac gold project. (Credit: Pixabay/PublicDomainPictures)
IAMGOLD has signed an agreement with Monarch Gold to acquire the Fayolle property for a purchase price of $11.5m.
Consisting of 39 mineral claims, Fayolle property covers an area of 1,373 hectares in Aiguebelle and Cléricy townships, approximately 35 km northeast of Rouyn-Noranda, Quebec.
The property was acquired by Monarch from Hecla Quebec and Typhoon Exploration in August last year.
The total consideration to be paid by IAMGOLD to acquire the property will include cash and stock issuance.
IAMGOLD will issue its common shares worth a total value of $9.7m to Monarch, as part of the total consideration.
The transaction price includes a $0.3m cash payment upon transfer of ownership of a parcel of land to IAMGOLD.
Besides, it will include a $1.5m cash payment 90 days after the initial transport of ore from the Fayolle deposit.
The transaction is expected to be completed in the coming weeks.
Monarch president and chief executive officer Jean-Marc Lacoste said: “This is a profitable short-term transaction for Monarch, allowing us to significantly strengthen our financial position without dilution and with the potential for appreciation if the share value of IAMGOLD increases, especially in the current gold bull market.”
Monarch plans to use proceeds from Fayolle sale to advance its Wasamac gold project
Monarch plans to use the sale proceeds to advance its Wasamac gold project located in the Province of Québec.
In May, the company signed a memorandum of understanding (MOU) with Glencore Canada for the potential use of Glencore’s Kidd concentrator in Timmins, Ontario for the treatment of ore to be mined from Wasamac property.
Lacoste added: “While Fayolle has potential, the fact remains that Wasamac is our priority project and the recent signing of the MOU with Glencore Canada has raised the outlook of our 2.6-million-ounce gold flagship project, which includes 1.8 million ounces of reserves.
“The funds from this transaction will allow us to advance the Wasamac project at a faster pace, while simultaneously pursuing exploration programs on our Beaufor and McKenzie Break properties.”