PERTH (miningweekly.com) – Dual-listed Chalice Gold Mines will divest of its Quebec gold projects for a C$12-million share in Chantrell Ventures Corporation.

Chantrell has entered into a definitive agreement to acquire certain noncore assets of TSX-listed Osisko Mining, and has undertaken a private placement to raise some C$18-million.

On the completion of these transactions, Chantrell will be renamed O3 Mining.

Under the terms of the agreement, Chalice would sell ofd its outstanding shares in wholly-owned subsidiary Chalice Gold Mines Quebec (CGMQ), which owns the East Cadillac and Kinebik gold projects, for more than 3.09-million shares in O3 Mining, at a deemed value of C$3.88 a common share, for a total consideration of C$12-million.

CGMQ also holds an underlying option agreement on the East Cadillac gold project with TSX-listed Globex Mining Enterprises and Renforth Resources.

Following the transaction, Chalice will hold a 7% interest in O3 Mining, while Osisko Mining would hold a 59% interest.

In addition, Chalice will also retain a 1% net smelter royalty on all its claims at both the projects that are not subject to a pre-existing royalty.

Chalice MD Alex Dorsch said on Wednesday that the agreement to sell the Quebec gold projects to the Osisko group was a great result for shareholders, and was the logical next step to build on the company’s exploration and consolidation effort in the Val-d’Or district.

“Osisko is one of the most recognised names in the Quebec gold industry, led by a highly regarded team with a track record of success in the Abitibi gold province. To be involved in Osisko’s new O3 Mining venture is a great opportunity for shareholders. O3 Mining will be well capitalized and hold a substantial portfolio of high potential gold assets, with a focus on the Val-d’Or gold district.”

Dorsch noted that the C$12-million in share consideration effectively reimbursed Chalice for its net expenditure on the two projects, and meant that the company was well positioned to benefit from future advancements of the combined O3 portfolio through its equity holding and royalty interest.

“Chalice has demonstrated sound commercial and technical acumen in successfully consolidating a district-scale holding and conducting high quality regional greenfield exploration. We look forward to O3 Mining’s highly regarded local team unlocking further upside on the projects through exploration.”

The transaction with Chantrell is subject to a number of conditions, including the completion of the Osisko transaction, the receipt of all necessary approvals and shareholder approval.