Canadian gold miner Iamgold will purchase the Fayolle property, in Quebec, from junior miner Monarch Gold for $11.50-million in a share and cash transaction.
The Fayolle property consists of 39 mineral claims covering 1 373 ha in the Aiguebelle and Cléricy townships, north-east of Rouyn-Noranda.
Announcing the transaction on Monday, Monarch said Iamgold would issue shares to the value of $9.70-million for the property, as well as a $300 000 cash payment upon transfer of ownership of a parcel of land and a $1.5-million cash payment 90 days after the initial transport of ore from the Fayolle deposit.
CEO Jean-Marc Lacoste said that the transaction was a profitable short-term option for Monarch, allowing it to strengthen its financial position without dilution and with the potential for appreciation if the share value of Iamgold increased.
“While Fayolle has potential, the fact remains that Wasamac is our priority project and the recent signing of the MoU [memorandum of understanding] with Glencore Canada has raised the outlook of our 2.6-million-ounce gold flagship project, which includes 1.8-million ounces of reserves.
“The funds from this transaction will allow us to advance the Wasamac project at a faster pace, while simultaneously pursuing exploration programmes on our Beaufor and McKenzie Break properties,” Lacoste said.
The transaction is expected to close in the coming weeks.