Kinross Gold (TSX: K, NYSE: KGC) has expanded its exploration footprint within Canada by investing in New Brunswick-focused junior Puma Exploration (TSXV: PUMA) and its various properties situated near the province’s Bathurst mining camp.
Under an option agreement signed Thursday, Kinross can earn a 65% interest in Puma’s Williams Brook, Portage and Jonpol properties by spending at least C$16.75 million on exploration during a five-year period, including a firm commitment of C$2 million for at least 5,000 metres of drilling within the first 18 months. Puma will remain the project operator during this period.
Marcel Robillard, Puma’s CEO, said that most of the initial C$2 million expenditure will be directed towards drilling and other identified targets on the company’s flagship Williams Brook property, and the injection of cash by Kinross over the next five years will “significantly accelerate exploration and unlock the project’s value.”
“Kinross’ commitment represents a stamp of approval on Williams Brook’s potential, and having Puma as the operator speaks to Kinross’ confidence in the strength of our exploration team,” he added.
Since 2021, Puma has spent C$12.5 million on exploring the property and made several gold discoveries. Its current focus is on the high-grade Lynx zone, where drilling has returned results up to 5 grams per tonne gold over 50.15 metres. The mineralization at Lynx has so far been traced over a distance of 750 metres along strike, a width of 100 metres and a depth of 200 metres.
Combined with its Portage and Jonpol properties, Puma’s land pacakge covers more than 490 square kilometres of prospective gold holdings near the Rocky Brook Millstream Fault, a major regional structure responsible for the gold deposition in the region.
“We believe in the region’s potential to host Canada’s next major gold camp. I am delighted to welcome Kinross, the first major gold producer to establish a presence in New Brunswick,” Robillard said in Thursday’s news release. Upon exercise of Kinross’ option, the companies would then form a 65/35 joint venture.
In addition to the option agreement, Kinross also intends to purchase approximately 16.86 million of Puma’s shares at C$0.06 per share for roughly C$1 million in proceeds, which the latter will use for its other projects. Upon completion, Kinross would hold 9.9% of Puma’s outstanding share capital.
Shares of Puma Exploration gained C$0.03 or 50% to C$0.09 by 1:50 p.m. ET following the Kinross investment. This gives the gold junior a market capitalization of C$13 million.
Source: MINING.COM – Read More
