First Mining Gold enters partnership to advance Hope Brook gold project

First Mining Gold Corp (TSX:FF) (OTCQX:FFMGF) (FRA:FMG) said it has signed a definitive agreement with Big Ridge Gold Corp (CVE:BRAU) (FRA:3H8B) whereby the latter may earn up to an 80% interest in the company’s Hope Brook gold project in Newfoundland, Canada.  

The company said that under the earn-in agreement, Big Ridge can earn an 80% stake in the project through a two-stage earn-in over five years by incurring a total of $20 million in qualifying expenditures, issuing up to 36.5 million shares to First Mining, and making a cash payment. 

READ: First Mining Gold says Auteco set to earn 51% of Pickle Crow gold project after fulfilling first stage requirements

First Mining said it will retain a 1.5% net smelter returns (NSR) royalty on the project, of which 0.5% can be bought back by Big Ridge for $2 million. It will also have the right to nominate one member to the board of directors of Big Ridge on the closing of the deal, and thereafter it will be entitled to have one of its nominees on the Big Ridge board for so long as it owns at least 10% of the issued and outstanding shares of Big Ridge.

“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 skillsets 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,” First Mining chief executive Dan Wilton said in a statement.

“Following the recent success from our partnership with Auteco Minerals on the Pickle Crow Gold Project, 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, where our recent PFS outlined the potential to produce more than 300,000 oz gold per year at an industry-leading cost profile. 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,” he added.

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