Chalice sells Cameron project

PERTH (miningweekly.com) – Dual-listed gold miner Chalice Gold Mines has agreed to divest of its Cameron gold project, in Ontario, in exchange for shares in TSX-listed First Mining Finance Corp.

Chalice told shareholders on Wednesday that the company would sell its wholly-owned subsidiary Cameron Gold Operations to First Mining in exchange for 32.36-million common shares in the Canadian firm.

Chalice would also be granted a 1% net smelter royalty over certain exploration licences at the Cameron project, which were not encumbered by pre-existing royalties.

Following the completion of the transaction, Chalice would hold an 8.1% interest in First Mining.

“Through this transaction, the company’s shareholders would retain exposure to the significant upside of the Cameron project through its 8% shareholding in First Mining, while maintaining a strong cash balance of around A$37-million to pursue other opportunities,” said Chalice MD Tim Goyder.

“The sale of the Cameron project to First Mining allows us to unlock significant value for shareholders. With their unique business model of aggressively acquiring advanced projects in North America, and a well-known and proven management team, First Mining is ideally placed to realise the value of this asset in an improving commodity price environment.”

The Cameron project has a total mineral resource estimate of 23.7-million tonnes, grading 2.05 g/t gold for 1.56-million ounces of contained gold.

Chalice acquired the project in 2014, but said on Wednesday that First Mining would be better placed to unlock the value of the project given its domicile in North America and the experience of its board and management.

The transaction was subject to shareholder approval as well as ASX and TSX approval.