First Mining Finance is pleased to announce that it has entered into a definitive share purchase agreement with Chalice Gold Mines.
Under the Agreement First Mining has agreed to acquire Cameron Gold Operations Ltd., a wholly-owned subsidiary of Chalice (the "Transaction") which owns the Cameron Gold project located in Ontario in exchange for 32,260,836 common shares of First Mining (the "Consideration Shares").
Chalice will also retain a one percent net smelter royalty over certain mining claims within the Cameron Gold project which are not encumbered by pre-existing royalties.
On completion of the Transaction, which is subject to Chalice shareholder approval, Chalice will hold approximately 8.1% of the issued and outstanding shares of First Mining. The parties to the Transaction are at arm’s length.
Pricing for the Transaction was based on the 20-day VWAP of the First Mining shares as of April 6, 2016.The deemed value of the Transaction is approximately $13,000,000.
The Cameron Gold project is an advanced-stage resource project located in the highly mineralized Kakagi Lake Greenstone Belt of the Archean-aged Superior Province located in southwestern Ontario, approximately 80 km south-east of the town of Kenora.
The project consists of a total of 154 unpatented claims, 24 patented claims, seven mining licences of occupation (MLO) and four mining leases for a total land package of 31,673 hectares. In December, 2015, Chalice filed a Technical Report (the "Report") entitled "Technical Report on the Cameron Gold Deposit, Ontario, Canada".
The Report included a resource estimate for the Cameron Gold project which, at a cut-off grade of 0.50 g/t gold, is estimated to have Measured and Indicated Resources of 7,824,000 tonnes grading 2.26 g/t gold (569,000 Au ounces) and Inferred Resources of 14,464,000 tonnes grading 1.92 g/t gold (894,000 Au ounces).
To the best of First Mining’s knowledge, information and belief, there is no new material scientific or technical information that would make the disclosure of the mineral resources in the Report inaccurate or misleading.
Dr. Chris Osterman, P. Geo., Chief Executive Officer of First Mining, a Qualified Person for the purposes of National Instrument 43-101 has reviewed the Report on behalf of First Mining and has approved the scientific and technical content of this news release.
Under the terms of the Agreement, on closing First Mining will issue an aggregate of 32,260,836 common shares of First Mining to Chalice. In addition, First Mining will grant a net smelter royalty of 1% to Chalice on certain mining claims within the Cameron Gold project which are not encumbered by pre-existing royalties.
First Mining will retain the right to repurchase 0.5% of the net smelter royalty for $1,000,000. Following the completion of the Transaction, Chalice will hold approximately 8.1% of the issued and outstanding shares of First Mining.
The Consideration Shares will be subject to a statutory resale restriction in Canada for a four-month period from completion of the Transaction. In addition, Chalice has agreed to further provisions, restricting the sales of shares, to not more than approximately one eighth of the total Consideration Shares per month over the following eight months except where the sale is in a single block to a purchaser acceptable to First Mining.
The Transaction is subject to approval of the shareholders of Chalice and to receipt of applicable regulatory and stock exchange approvals and the satisfaction of certain other closing conditions customary in transactions of this nature.
Keith Neumeyer, Chairman of First Mining, stated: "The acquisition of the Cameron gold project further enhances First Mining’s position in Ontario and adds to our portfolio an attractive property with a significant established resource and a very large land package with significant exploration upside. This accretive acquisition increases our global Measured and Indicated in-situ gold resources to over 6.8 million ounces and our total Inferred in-situ gold resources to over 3.5 million ounces."
Chalice is expected to hold a shareholder meeting to approve the Transaction on or about June 17, 2016, and closing is expected to occur shortly thereafter.