First Mining Gold Corp. (“First Mining” or the
“Company”) (TSX:FF) (OTCQX:FFMGF) (FRANKFURT:FMG) is
pleased to announce the signing of an option agreement with Gainey
Capital Corp. (“Gainey”), granting Gainey the right to earn a 100%
interest in First Mining’s Las Margaritas Gold Property (“Las
Margaritas”) located in the State of Durango, Mexico.
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.”
Under the terms of the four year option
agreement, Gainey can elect to make either annual share or cash
payments to First Mining in the following amounts:
Payment Term |
CAD$ Aggregate Value of Gainey Common Shares (applicable
Mexican VAT to be paid in cash payment) |
CAD$ Cash Payment (inclusive of applicable Mexican VAT @
16%) |
Upon approval by the TSX Venture Exchange
(“TSX-V”) |
$75,000 in Shares |
N/A |
$12,000 in Cash - VAT |
First anniversary date of the
agreement |
$175,000 in Shares |
$174,000 in Cash |
$28,000 in Cash - VAT |
Second anniversary date of the
agreement |
$250,000 in Shares |
$261,000 in Cash |
$40,000 in Cash - VAT |
Third anniversary date of the
agreement |
$225,000 in Shares |
$232,000 in Cash |
$36,000 in Cash - VAT |
Fourth anniversary date of the
agreement |
$225,000 in Shares |
$232,000 in Cash |
$36,000 in Cash - VAT |
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.
ABOUT FIRST MINING GOLD
CORP.
First Mining Gold Corp. is an emerging
development company with a diversified portfolio of gold projects
in North America. Having assembled a large resource base
of 7 million ounces of gold in the
Measured and Indicated categories
and 5 million ounces of gold in the
Inferred category in mining friendly jurisdictions
of eastern Canada, First Mining is now focused on advancing its
assets towards production. The Company currently holds a
portfolio of 25 mineral assets in Canada, Mexico and the United
States
For further information, please contact Jeff
Swinoga, President and CEO, at 416-816-0424, or Derek Iwanaka, Vice
President of Investor Relations, at 604-639-8824, or visit our
website at www.firstmininggold.com.
ON BEHALF OF FIRST MINING GOLD
CORP.
“Keith Neumeyer”
Keith Neumeyer Chairman
Cautionary Note Regarding
Forward-Looking Statements
This news release includes certain
"forward-looking information” and "forward-looking statements”
(collectively "forward-looking statements”) within the meaning of
applicable Canadian and United States securities legislation
including the United States Private Securities Litigation Reform
Act of 1995. These forward-looking statements are made as of
the date of this news release. Forward-looking statements are
frequently, but not always, identified by words such as "expects”,
"anticipates”, "believes”, “plans”, “projects”, "intends”,
"estimates”, “envisages”, "potential”, "possible”, “strategy”,
“goals”, “objectives”, or variations thereof or stating that
certain actions, events or results "may", "could", "would", "might"
or "will" be taken, occur or be achieved, or the negative of any of
these terms and similar expressions.
Forward-looking statements in this news release
relate to future events or future performance and reflect current
estimates, predictions, expectations or beliefs regarding future
events and include, but are not limited to, statements with respect
to: (i) the consideration payable by Gainey to First Mining under
the terms of the option agreement between the two companies; (ii)
the annual cash payments that Gainey is required to make to First
Mining between September 2018 and September 2021; (iii) the
exploration expenditures that Gainey is required to incur on the
Las Margaritas property during the four year option period; (iv)
the commencement of commercial production at the Las Margaritas
property; and (v) TSX-V approval. All forward-looking
statements are based on First Mining's or its consultants' current
beliefs as well as various assumptions made by them and information
currently available to them. There can be no assurance that
such statements will prove to be accurate, and actual results and
future events could differ materially from those anticipated in
such statements. Forward-looking statements reflect the
beliefs, opinions and projections on the date the statements are
made and are based upon a number of assumptions and estimates that,
while considered reasonable by the respective parties, are
inherently subject to significant business, economic, competitive,
political and social uncertainties and contingencies. Many
factors, both known and unknown, could cause actual results,
performance or achievements to be materially different from the
results, performance or achievements that are or may be expressed
or implied by such forward-looking statements and the parties have
made assumptions and estimates based on or related to many of these
factors. Such factors include, without limitation;
fluctuations in the spot and forward price of gold, silver, base
metals or certain other commodities; fluctuations in the currency
markets (such as the Canadian dollar versus the U.S. dollar);
changes in national and local government, legislation, taxation,
controls, regulations and political or economic developments; risks
and hazards associated with the business of mineral exploration,
development and mining (including environmental hazards, industrial
accidents, unusual or unexpected formations, pressures, cave-ins
and flooding); the presence of laws and regulations that may impose
restrictions on mining; employee relations; relationships with and
claims by local communities, indigenous populations and other
stakeholders; availability and increasing costs associated with
mining inputs and labour; the speculative nature of mineral
exploration and development; title to properties.; and the
additional risks described in the Company’s Annual Information Form
for the year ended December 31, 2017 filed with the Canadian
securities regulatory authorities under the Company’s SEDAR profile
at www.sedar.com, and in the Company’s Annual Report on Form 40-F
filed with the SEC on EDGAR.
Cautionary Note to United States
Investors
This news release has been prepared in
accordance with the requirements of the securities laws in effect
in Canada, which differ from the requirements of U.S. securities
laws. Unless otherwise indicated, all resource and reserve
estimates included in this news release have been prepared in
accordance with National Instrument 43-101 Standards of Disclosure
for Mineral Projects ("NI 43-101”) and the Canadian Institute of
Mining, Metallurgy, and Petroleum 2014 Definition Standards on
Mineral Resources and Mineral Reserves. NI 43-101 is a rule
developed by the Canadian Securities Administrators which
establishes standards for all public disclosure an issuer makes of
scientific and technical information concerning mineral
projects. Canadian standards, including NI 43-101, differ
significantly from the requirements of the United States Securities
and Exchange Commission ("SEC”), and mineral resource and reserve
information contained herein may not be comparable to similar
information disclosed by U.S. companies. In particular, and
without limiting the generality of the foregoing, the term
"resource” does not equate to the term "reserves”. Under U.S.
standards, mineralization may not be classified as a "reserve”
unless the determination has been made that the mineralization
could be economically and legally produced or extracted at the time
the reserve determination is made. The SEC's disclosure
standards normally do not permit the inclusion of information
concerning "measured mineral resources”, "indicated mineral
resources” or "inferred mineral resources” or other descriptions of
the amount of mineralization in mineral deposits that do not
constitute "reserves” by U.S. standards in documents filed with the
SEC. Investors are cautioned not to assume that any part or
all of mineral deposits in these categories will ever be converted
into reserves. U.S. investors should also understand that
"inferred mineral resources” have a great amount of uncertainty as
to their existence and great uncertainty as to their economic and
legal feasibility. It cannot be assumed that all or any part
of an "inferred mineral resource” will ever be upgraded to a higher
category. Under Canadian rules, estimated "inferred mineral
resources” may not form the basis of feasibility or pre-feasibility
studies except in rare cases. Investors are cautioned not to
assume that all or any part of an "inferred mineral resource”
exists or is economically or legally mineable. Disclosure of
"contained ounces” in a resource is permitted disclosure under
Canadian regulations; however, the SEC normally only permits
issuers to report mineralization that does not constitute
"reserves” by SEC standards as in-place tonnage and grade without
reference to unit measures. The requirements of NI 43-101 for
identification of "reserves” are also not the same as those of the
SEC, and reserves reported by the Company in compliance with NI
43-101 may not qualify as "reserves” under SEC standards.
Accordingly, information concerning mineral deposits set forth
herein may not be comparable with information made public by
companies that report in accordance with U.S. standards.
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/26774e8b-b9f5-496f-8e76-569fc8dc43a9
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