Agnico Eagle Mines (TSX: AEM; NYSE: AEM), the third-largest gold miner by market value, is buying a stake of junior FireFox Gold (TSXV: FFOX) that may progress to a joint venture on a project in northern Finland.
The C$1.4 million private placement gives Agnico a 10.9% holding with the option to own almost 20% in FireFox, which has the Kohlo property and the Mustajärvi project in the Lapland region some 900 km north of Helsinki, the companies said on Wednesday.
Agnico may also earn a 51% interest in Kolho by spending $5 million on exploration within five years, according to the deal. It could then form a venture with FireFox to develop the project as operator and expend $7.5 million more for a further 24% ownership, the company said.
“Our company was the first junior gold explorer built around a Finland-based CEO and Finland-based exploration management,” FireFox CEO Carl Löfberg said in the release. “Now we are part of a growing community of local and international mining professionals in Finland, and we find ourselves working closely with Europe’s largest gold miner.”
Also, Denver-based Crescat Portfolio Management, whose Precious Metals Fund has gained 27.8% since inception three years ago, took a 17.8% stake in FireFox for C$1.7 million, the explorer said.
FireFox has completed airborne magnetic surveys and limited reconnaissance mapping and sampling on the 120-sq.-km Kolho property northeast of Rupert Resources‘ (TSX: RUP) Ikkari discovery and FireFox’s Sarvi property. Ikkari might produce 200,000 oz. gold a year, according to a 2022 preliminary economic assessment.
Agnico’s private placement funding will be directed to drilling and exploration at FireFox’s Mustajärvi project, which is more advanced than Kolho. The junior also has the Jeesiö and Sarvi properties where earlier stage exploration targets are being advanced, it said.
Shares in FireFox closed unchanged at C$0.055 apiece on Wednesday in Toronto, valuing the company at C$7.7 million. Shares in Agnico Eagle fell 2.2% in the same session to C$72.28 for a market value of C$35.8 billion ($26.9bn).
Source: MINING.COM – Read More
