Canada-based i-80 Gold has signed an asset exchange deal with Nevada Gold Mines (NGM) with an aim to create a major mining complex in the US state of Nevada.
In this regard, the Canadian miner will acquire some processing infrastructure and the Lone Tree and Buffalo Mountain gold deposits from Nevada Gold Mines. The processing infrastructure, which includes an autoclave, is presently in care and maintenance.
In return, Nevada Gold Mines will acquire i-80 Gold’s 40% stake in the South Arturo Property. This will give the company full ownership of South Arturo, thereby gaining the flexibility to pursue potential operational synergies with its other assets in Nevada.
Apart from that, Nevada Gold Mines will have a low-cost option to acquire the adjacent Rodeo Creek exploration property from i-80 Gold.
Nevada Gold Mines, which is a joint venture between Barrick Gold and Newmont, will also be entitled to a contingent consideration of up to $50m. This will be based on production from the Lone Tree asset.
In a separate deal, i-80 Gold has agreed to buy the Ruby Hill gold mine in Eureka County, Nevada from affiliates of Waterton Global Resource Management.
I-80 Gold CEO Ewan Downie said: “These transformational acquisitions result in a significant increase in the Company’s mineral resource base, and position i-80 to become one of the largest gold producers in the State of Nevada with the capacity to process refractory and oxide mineralisation.
“Importantly, i-80 gains a strategic advantage becoming one of only three companies in Nevada with infrastructure to process refractory mineral resources once the Lone Tree facility has been retrofitted to suit the Company’s deposits.”
Additionally, the Canadian miner said that Nevada Gold Mines will acquire up to 9.9% interest in the company’s new treasury common shares for a price of up to $50m through a private placement.
Nevada Gold Mines executive managing director Greg Walker said: “This is a win-win transaction for both Nevada Gold Mines and i-80.
“Through the acquisition of Lone Tree, an asset not being utilized by NGM has become a transformational asset for i-80. In return, NGM’s acquisition of i-80’s 40% of the South Arturo Joint Venture secures additional ounces with both open-pit and underground optionality for our Carlin operation.”
Equinox Gold, which holds a stake in i-80 Gold, also plans to take part in the latter’s equity private placement.
I-80 Gold also announced entering into a non-binding term sheet with Orion Mine Finance for securing financing from the latter for up to $240m to support its acquisition and development activities.
The closing of the asset exchange deal is subject to various conditions, which includes the approval from the Toronto Stock Exchange.
