First Mining Gold has signed a funding agreement with First Majestic Silver for its Springpole gold project located in Ontario, Canada.
Under the terms of the agreement, First Majestic will pay $22.5m to acquire a stream on 50% of payable silver produced from Springpole for the life of the project.
Springpole is expected to produce 22 million ounces of silver over the life of the project, according to the 2019 Preliminary Economic Assessment (PEA).
The agreement enables First Majestic to buy of half of that estimated production from the project.
First Majestic has signed the silver purchase agreement with First Mining’s wholly-owned subsidiary, Gold Canyon Resources, which owns 100% of Springpole.
The transaction is First Majestic’s first investment outside of Mexico and increases its silver exposure.
First Majestic Silver president and CEO Keith Neumeyer said: “This new silver stream gives First Majestic significant upside potential to higher silver prices while minimizing risks and costs.
“With approximately 22 million ounces of silver expected to be produced over the life of the project, and additional exploration upside, Springpole has both the scale and location to make this an ideal investment for our long-term portfolio. In addition, this silver stream marks our first investment outside of Mexico in the company’s 18-year history.”
Springpole gold project holds significant infrastructure at site
Situated within the Birch-Uchi Greenstone Belt, the project approximately 110km northeast of the town of Red Lake.
Covering a land position totaling 41,943ha, Springpole is one of Canada’s largest, undeveloped gold projects.
The Springpole gold project holds significant infrastructure at site including a 72-person camp, winter road access, and nearby logging road and power lines.
The property contains a large, open-pittable deposit having an Indicated Resource of 139.1 million tonnes at 1.04 g/t gold and 5.4 g/t silver, containing 4,670,000 ounces of gold and 24,190,000 ounces of silver.
