The property is located approximately 140 kilometres to the southeast of Mazatlan, Sinaloa and is comprised of two mineral concessions encompassing a total of 500 hectares. See Figure 1 further below.
Jeff Swinoga, President & CEO of First Mining stated, “This transaction unlocks the unrealized value of this prospective but under-explored Mexican gold property. Since First Mining is focusing on advancing the development of its Springpole Gold Project and Goldlund Gold Project, each in northwestern Ontario, entering into this option agreement adds immediate value to our shareholders while at the same time negating any holding costs on this property.”
In addition, as per the terms of the option agreement, Gainey will make annual cash payments to First Mining of USD$25,000 from September 2018 to September 2020, and USD$250,000 in September 2021 in connection with an existing agreement on the property, and will incur exploration expenditures on the Las Margaritas property totaling USD$1,000,000 over the four year option period. Upon completion, Gainey will obtain 100% ownership of the Las Margaritas property and First Mining will retain a 2% net smelter returns (“NSR”) royalty, with Gainey having the right to buy back 1% of the NSR royalty for USD$1,000,000 up until the first anniversary of the commencement of commercial production at the property.
The transaction and the issuance of Gainey’s common shares pursuant to the option agreement are subject to acceptance by the TSX Venture Exchange.
Source: Company Press Release
