Gold producer Agnico Eagle on Thursday announced an investment in TSX-V-listed Maple Gold Mines and the planned creation of a joint venture (JV) to combine two adjacent projects into a consolidated joint property package in the Abitibi region of Quebec.
The news sent Maple’s share price up 30% to C$0.22 a share.
Dual-listed Agnico would subscribe for 25 838 821 units of Maple in a non-brokered private placement at C$0.239 a unit for total consideration of about C$6.18-million.
Upon closing, Agnico’s shareholding in Maple would increase from 4.4% to 12.84% on a non-diluted basis and 19.9% on a partially-diluted basis.
Regarding the 50:50 JV, Agnico said the contemplated venture would combine Maple's Douay project and its Joutel project, which hosted the past-producing Telbel mine.
Agnico would fund C$18-million in exploration expenses over a four-year period, the companies would jointly fund an additional C$500 000 in exploration of VMS targets on the western portion of the Douay project and they would each be granted a 2% net smelter royalty on the property that they contribute to the JV, each with aggregate buyback provisions of $40-million.
The strategic investment by Agnico brings Maple Gold's cash balance to more than C$12-million which, when combined with the C$18-million in JV funding, would place the smaller company in a strong position to advance exploration, development and new corporate growth opportunities, Maple president and CEO Matthew Hornor commented in a statement.
"The strategic partnership with Agnico marks a transformational milestone for Maple Gold and supports the opportunity in front of us,” he said.
Edited by: Creamer Media Reporter
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