First Mining Finance announced that a 27,000m drilling campaign has commenced at the its wholly-owned Goldlund gold project in northwestern Ontario, Canada.
The program will focus on infill and resource expansion of Zone Seven, which currently hosts a significant portion of the mineralized material at the project. Drilling has started with two rigs and we expect to progress to three rigs as the campaign ramps up.
Earlier this month the Company released an initial resource estimate for Goldlund (see the Company’s press release dated January 9, 2017 for full details). The goal of the current drilling campaign is to further enhance the existing resources at Goldlund, and to assist the Company in advancing Goldlund to a preliminary economic assessment (PEA) level. The timing of any PEA at Goldlund has not yet been determined.
First Mining is also pleased to announce that it has entered into definitive asset purchase agreements to purchase certain mineral claims located in Ontario and Québec.
The first agreement is with GoldON Resources Ltd. (“GoldON”) and pursuant to this agreement, First Mining has agreed to acquire GoldON’s five unpatented mining claims (the “GoldON Transaction”) located near Pickle Lake, Ontario in exchange for 200,000 common shares of First Mining (the “GoldON Transaction Shares”).
The second agreement is with a private individual (the “Duparquet Vendor”), and pursuant to this agreement, First Mining has agreed to acquire eighteen mining claims located in the Township of Duparquet, Québec (the “Central Duparquet Transaction”) in exchange for $250,000 and 2,500,000 common shares of First Mining (the “Central Duparquet Transaction Shares”).
Keith Neumeyer, Chairman of First Mining, stated “We are excited about the drilling campaign that we have launched at our Goldlund project, and the prospects that it holds for resource expansion. We believe our Goldlund project has the potential to be one of our core projects. This initial drill campaign is expected to be a phase one of several campaigns in the coming years to further advance this project to a PEA level. We are also very pleased to have acquired the additional Pickle Lake and Central Duparquet claims as we believe the consolidation of regions we are active in should be a continued process that benefits each of our projects.”
The parties to the GoldON Transaction and the Central Duparquet Transaction are at arm’s length, and pricing for each transaction was based on the 5-day VWAP of First Mining’s shares as of today’s date, being $0.84. The deemed value of the GoldON Transaction is approximately $168,000, and the deemed value of the Central Duparquet Transaction is approximately $2,350,000.
The GoldON Transaction Shares and the Central Duparquet Transaction Shares will be subject to a statutory resale restriction in Canada for a four-month period from completion of the GoldON Transaction and the Central Duparquet Transaction, respectively. In addition, the Duparquet Vendor has agreed to further provisions limiting the number of shares he may sell per month after the statutory resale restriction period has passed, unless the sale is in a single block to a purchaser acceptable to First Mining.
Both transactions are subject to the receipt of applicable regulatory and stock exchange approvals and the satisfaction of certain other closing conditions customary in transactions of this nature. First Mining expects to complete both transactions by January 31st.