Auteco Funds First Mining JV’s Pickle Crow Gold Project in Ontario
First Mining Gold Corp reported that it has received notice from Auteco Minerals Ltd has fulfilled the Stage 1 CAD 5 million expenditure requirement as stipulated under the earn-in agreement with First Mining in respect of the Pickle Crow Gold Project located in northwestern Ontario in Canada. As a result, Auteco will now hold a meeting of its shareholders to approve the issuance of 100,000,000 Auteco shares to First Mining, and it will apply to the Australian Securities Exchange for listing approval for such shares. First Mining expects to receive the 100,000,000 Auteco shares by the end of April, and upon receipt of such shares, Auteco will earn a 51% interest in PC Gold Inc, the Company's wholly-owned subsidiary that owns Pickle Crow.
A map showing the identified regional shear zones and walk-up drill targets within the property area (CNW Group/First Mining Gold Corp.)
"First Mining is delighted that Auteco has completed its $5 million worth of Stage 1 expenditures on the Pickle Crow project in just one year, even though Auteco had three years to complete these expenditures" stated Dan Wilton, CEO of First Mining. "Our partnership with Auteco has surfaced significant value for First Mining shareholders and continues to highlight the potential value for the Pickle Crow deposit. Our team remains encouraged and eagerly awaits results from Auteco's ongoing 45,000-metre drill program."
"The successful completion of the Stage 1 expenditures requirement at Pickle Crow marks a significant milestone in the development of this exciting project" commented Ray Shorrocks, Auteco's Executive Chairman. "The promising results from our initial drill program have truly motivated our team to continue to establish Pickle Crow as a large, high-grade deposit in a Tier-1 location."
Once the 100,000,000 Auteco shares have been issued to First Mining, Auteco will have earned a 51% interest in PC Gold (and thereby, Pickle Crow) and the parties will execute a joint venture shareholders' agreement (the "JV Agreement") in respect of PC Gold. Auteco will have a two-year follow-on period, commencing as of the date of execution of the JV Agreement, within which to acquire an additional 19% interest in PC Gold (the "Stage 2 Earn-In") by: (i) incurring a further $5 million in exploration expenditures (the "Additional Expenditures"); and (ii) paying $1,000,000 to First Mining within 90 days of completing the Additional Expenditures. In addition, upon completing the Stage 2 Earn-In, Auteco will grant First Mining a 2% net smelter returns ("NSR") royalty on Pickle Crow, of which 1% can be bought back by Auteco for US$2.5 million. Following completion of the Stage 2 Earn-In, Auteco has the right to acquire a further 10% of PC Gold by paying $3,000,000 (the "Buy-In") to First Mining, and if Auteco makes a decision to mine prior to completing the Stage 2 Earn-In, Auteco must pay First Mining the Buy-In concurrently with the completion of the Stage 2 Earn-In.
A 45,000-metre drill program with five diamond drill rigs is underway at Pickle Crow, with the objective of updating the Project's mineral resource estimate by the mid-year 2021. To date, Auteco has completed 84 diamond drill holes for 19,400 metres, focusing exclusively on near mine extensions and mineralized structures outside of the resource area. Once the current drill program has been completed, Auteco plans to transition their drill program to infill drilling and resource definition in order to provide sufficient data density to update the current mineral resource estimate for Pickle Crow.
Auteco finished 2020 with A$29.6 million cash and is well-funded to execute the remaining earn-in requirements to earn up to an 80% interest in PC Gold (and thereby, Pickle Crow). Once Auteco has fulfilled all requirements of the earn-in agreement, First Mining will hold a 20% interest in PC Gold (and thereby, the Pickle Crow project) which will be free carried until the earlier of the termination of the earn-in agreement or a decision to mine by Auteco.
The current phase of drilling has successfully intersected extensions to known mineralized structures, in addition to the discovery of previously undefined mineralization. Recent drill highlights include:
5.6 m @ 33.4 g/t gold from 20.3 m in hole AUDD0078 (Shaft 3 Veins) – New Structure(includes 3.4 m @ 51.3 g/t gold from 20.3 m) with individual assay grades of up to 117 g/t gold and 109 g/t gold (0.4 m @ 117 g/t gold from 21.3 m and 0.3 m @ 109 g/t gold from 22.8 m)
1.6 m @ 16.9 g/t gold from 12.7 m in hole AUDD0077 (Shaft 3 Veins) – New Structure(includes 0.7 m @ 36.6 g/t gold from 13.6 m)
2 m @ 8.2 g/t gold from 396.5 m in hole AUDD0056 (Shaft 1 Veins) – Extension of Structure
4 m @ 5.9 g/t gold from 420 m in hole AUDD0056 (Shaft 1 Veins) – Extension of Structure