First Mining Gold Corp (TSE:FF) (OTCQX:FFMGF) said its partner Auteco Minerals (ASX:AUT) is progressing apace with efforts to earn up to an 80% stake in the Pickle Crow gold project in Ontario and has already fulfilled an initial exploration spend of C$750,000 in the first stage of the deal.
Auteco began exploration in May, including an extensive drill campaign and initial expenditure requirements have been completed in just four months, compared to 12 required, noted First Mining. In addition, on July 30, a second diamond rig was added to the program to test for shallow, high-grade targets.
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"This partnership has already surfaced significant value for First Mining shareholders and highlights the potential value of each of the projects in our robust portfolio of Canadian gold assets," said Dan Wilton, CEO of First Mining in a statement.
"With a well-funded strategy, which included Auteco raising A$30.4 million last month, Auteco continues to increase their understanding of the Pickle Crow district as they advance an expanded drill program, now planned for 10,000 metres."
So far, around 3,800 metres (m) of an expanded 10,000m program have been completed, highlighted First Mining.
To complete stage 1 and earn into 51% interest in PC Gold Inc, the subsidiary that owns Pickle Crow, Auteco will need to incur a further C$4.25 million within the next two years and issue a further 100 million shares to First Mining.
Auteco is now well funded to execute on the C$10 million earn-in requirements to earn up to an 80% interest in PC Gold, said First Mining. At that point, First Mining will hold the remaining 20% interest and will have a free carry until either the agreement is terminated or there is a production decision.
Once Auteco has completed its Stage 2 earn-in requirements to get up to 70%, First Mining will be granted a 2% net smelter returns (NSR) royalty by Auteco on Pickle Crow, of which 1% can be bought back by Auteco for US$2.5 million.
First Mining is focused on advancing the Springpole gold Project in Ontario - one of the largest undeveloped gold projects in Canada. It also has a large equity position in Treasury Metals Inc, which is advancing the Goliath-Goldlund gold project in the province towards construction.
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