FireFox Gold up 36% on Agnico financing and option news

Firefox Gold Corp. [FFOX-TSXV, FFOXF-OTCQB] has announced the closing of a strategic financing and an option agreement with Agnico-Eagle Mines Ltd. [AEM-TSX, AEM-NYSE].

Agnico has acquired 19.01 million units of FireFox Gold in a non-brokered private placement priced at 7.5 cents per unit, generating $1.42 million.  Each unit consists of one common share of FireFox and one share purchase warrant, each of which entitles the holder to acquire one common share for 10 cents at any time prior to December 20, 2028.

The private placement leaves Agnico with ownership of 19.01 million common shares and the same number of warrants, representing 10.9% of FireFox’s issued and outstanding shares on a non-diluted basis and 19.6% on a partially-diluted basis. The agreement contains top up rights enabling Agnico to maintain certain ownership thresholds in FireFox.

FireFox advanced on the news, rising 36.4% or $0.02 to $0.075 on volume of 491,000. The shares are trading in a 52-week range of 15.5 cents and $0.03.

Firefox controls a large land position in the Central Lapland Greenstone Belt in Finland. The junior has granted Agnico an exclusive right to earn a 51% interest in the Kolho property.

Kolho is a group of exploration permit applications and one exploration permit (Nuttio) that occupies a prospective structural corridor northeast of Rupert Resources Ltd.’s [RUP-TSXV] Ikkari discovery and FireFox’s Sarvi property.

Ikkari is part of the Rupert Lapland Project, which also includes the Pahtavaara gold mine, mill, and exploration permits, plus concessions, which are located in the Central Lapland Greenstone Belt. Pahtavaara operated between 1996 and 2014, producing almost 450,000 ounces of gold, and still contains an inferred resource of 474,000 ounces, according to a NI 43-101 technical report released in April, 2018.

Rupert’s Finland properties are adjacent to the Kittila gold mining operations of Agnico-Eagle, which holds a 9.9% stake in Rupert.

The Kolho property covers more than 120 square kilometres. Firefox has completed detailed airborne magnetic surveys and limited reconnaissance mapping and sampling in the area.

Agnico can exercise the option to earn a 51% stake in Kolho by spending US$5.0 million before the fifth anniversary of the agreement. Of that amount, US$2.0 million constitutes a committed amount that must be spent prior to the third anniversary of the date that certain permits are granted in relation to the Kolho property.

Upon earning a 51% interest in the property, Agnico and FireFox will enter into a joint venture, in which Agnico will become the operator and be entitled to a 5.0% management fee. Under the joint venture agreement, Agnico can acquire an additional 24% in the property by spending an another US$7.5 before the eighth anniversary of the earn-in grant date. A portion of the Kolho property is subject to an existing 1.5% net smelter return royalty.

Neither the earn-in agreement nor the private placement affect any of FireFox’s other mineral rights in Lapland, where it retains a 100% interest in the Mustajarvi, project, as well as the Jessio and Sarvi properties.