FireFly Metals Ltd (ASX:FFM) is set to acquire prospective additional territory adjacent to its Green Bay Copper-Gold Project in Newfoundland, Canada.
Dominant landholder
The purchase, from Gold Hunter Resources Inc, positions FireFly as a dominant landholder in Newfoundland's Baie Verte VMS minerals district.
FireFly is set to pick up tenements valued at C$15.5 million, following a cash payment of C$500,000 and C$15 million in fully paid ordinary FireFly shares.
This transaction is subject to various conditions, including shareholder approval from Gold Hunter, whose board is unanimously in favour of and committed to the deal.
The deal entails FireFly purchasing 100% of the issued capital of 1451366 BC Ltd, a wholly-owned subsidiary of Gold Hunter.
Extended interests in projects
Post-completion, this subsidiary will own complete interests in the Rambler and Tilt Cove projects and rights to the Marwan Project.
An important element of the agreement is the assignment of an option to acquire the Marwan Project to 1451366 BC Ltd, requiring a cash payment of C$500,000 within 30 days post-acquisition.
The consideration for this acquisition includes 30,290,624 shares, calculated based on the 20-day volume weighted average price of FireFly’s shares on the ASX.
FireFly will also address an existing C$1.5 million liability of Gold Hunter through a similar share issue.
The deal is expected to be finalised in February, with FireFly leveraging its existing cash reserves to fund the Marwan Option exercise.
The acquisition is contingent on several precedents, including the aforementioned shareholder approval for Gold Hunter, amendments to the mineral property option agreement with Unity Resources Inc and approvals from the Canadian Securities Exchange.
Canaccord Genuity Capital Markets served as the financial adviser to Firefly Metals Ltd for this acquisition.