First Mining Gold Corp. [FF-TSX; FFMGF-OTCQX; FMG-FSE] said it has entered into a binding term sheet with Auteco Minerals Ltd. [AUT-ASX], allowing Auteco to earn an 80% interest in First Mining’s Pickle Crow Gold Project in northwestern Ontario.
Auteco is an Australian Stock Exchange-listed mineral exploration company with a focus on vanadium and titanium mineralization at the Limestone Well Project located 90 km southeast of Meekatharra, western Australia.
Auteco can exercise the Pickle Crow option by spending $10 million on exploration over five years and making cash payments of $4.1 million and issuing 125 million shares to First Mining. Under the agreement, First Mining will also retain a 2% net smelter return royalty (NSR), 1% of which can be reacquired for US$2.5 million.
First Mining shares advanced on Tuesday, rising 2.17% or $0.005 to 23.5 cents. The shares are currently trading in a 52-week range of 21 cents and 41 cents.
First Mining is an emerging development company with a portfolio of diversified gold projects in North America. The company was created by Keith Neumeyer, founding President and CEO of First Majestic Silver Corp. [FR-TSX; AG-NYSE; FMV-FSE] and First Quantum Minerals Ltd. [FM-TSX].
Its flagship asset is the Springpole Gold Project, also located in northwestern Ontario, and is currently one of the largest undeveloped gold projects in Canada. Springpole is estimated to host 4.67 million ounces of gold in the Indicated category and 230,000 ounces in the Inferred Resource category.
The Pickle Crow property hosts a NI 43-101 compliant Inferred Resource of approximately 9.5 million tonnes, grading 4.1 g/t gold, or 1.23 million ounces of gold. Previously a high-grade operating mine, it ran from 1935 to 1966, producing an estimated 1.5 million ounces of gold at an average grade of 16.14 g/t gold. The property consists of 19,000 km2 of tenure, covering a major gold province.
It comes with extensive infrastructure, including a 200 tonne-per-day gravity mill, paved access road, as well as generators and fuel storage. The property is located within 10 km of a paved airport at Pickle Lake.
“This agreement allows the company and our shareholders to retain an interest in Pickle Crow’s advancement as the Auteco team work to define the project potential through drilling and exploration, while First Mining’s near-term focus remains on advancing our Springpole and Goldlund gold projects,” said First Mining CEO Dan Wilton.
Goldlund is located 60 km northeast of Dryden, Ontario. The advanced stage exploration project contains an Indicated Resource of 809,200 ounces of gold, plus an Inferred Resource of 876,954 ounces.
There has been limited exploration of Pickle Crow since mining ceased in 1966. The most recent work conducted was focused on developing small remnant resources near the old mine infrastructure. Auteco intends to return to first principles at the project, with a focus on discovering and developing new project-scale gold resources.