Maritime soars on New Found Gold toll milling MOU
New Found Gold Corp. [NFG-TSXV] said Monday it has struck a non-binding memorandum of understanding (MOU) with Maritime Resources Corp. [MAE-TSXV]. Under the MOU, New Found can conduct due diligence and exclusively negotiate a toll milling agreement involving the Pine Cove mill in Newfoundland.
The mill is a key part of the Point Rousse gold project, which Maritime is working to secure via the acquisition of all the issued and outstanding shares of Point Rousse Mining Inc. from Signal Gold Inc. [SGNL-TSX, SGNLF-OTCQX].
Maritime Resources shares rallied on the news, rising 42.8% or $0.015 to $0.05 on volume of 5.04 million, making it the most actively traded stock on the TSX Venture Exchange, Monday. The shares are trading in a 52-week range of $0.065 and $0.035.
New Found Gold shares were unchanged at $5.96 and trade in a 52-week range of $7.60 and $4.03.
The Pine Cove mill is a fully permitted gold processing facility that was operating as recently as the first quarter of this year and is rated at 1,400 tonnes per day with a large capacity tailings storage facility and access to port infrastructure.
Pine Cove is located on the Baie Verte peninsula, approximately 270 kilometres from the Queensway project by paved highway.
New Found is currently advancing its 100%-owned Queensway gold project located 15 kilometres west of Gander, Newfoundland, where a 500,000-metre drill campaign is currently under way. Drilling is focused on a 9.5-kilometre corridor along the Appleton fault where the company has made several high-grade gold discoveries.
In addition, New Found said that under the terms of a brokered private placement, it intends to buy non-convertible senior secured notes and common share purchase warrants of Maritime for US$2 million. It said the notes will be issued in US$1,000 increments, less 2.0% original issue discount on the principal amount of the notes.
The note warrants will entitle New Found to purchase common shares of Maritime equal to 40% of the aggregate principal amount of the notes and will be exercisable until the maturity date of the notes.
In a separate press release, Maritime said it will use the proceeds to fund the acquisition of all the issued and outstanding shares of Point Rousse Mining from Signal Gold.
“We are pleased to announce these transactions with New Found and look forward to working with them to study opportunities for toll processing at Pine Cove,’’ said Maritime President and CEO Garett MacDonald. “The Pine Cove site offers enormous flexibility for gold processing,” he said. “The MOU with New Found illustrates the mining industry’s commitment to minimizing its environmental footprint by utilizing existing infrastructure.’’