Osisko Mining, Canadian junior team up to speed up gold exploration in Ontario
Osisko Mining (TSX:OSK) and Canadian Gold Miner Corp., in which Transition Metals (TSX-V:XTM) has a 40% stake, closed Friday a deal to acquire together a historical gold producer as well as an option for an exploration land package, both in Ontario’s gold-rich belt.
The transaction gives the partners the DeSantis property, located in the heart of the Timmins Gold Camp and the possibility to grab a stake on the Catharine asset, near CGM's focus area south of Kirkland Lake, Ontario in exchange for 2.5 million common shares of CGM valued at $0.20 per share.
“In addition to adding two properties with good exploration potential to our portfolio, we view the transaction as a significant milestone that should help us attract additional investment interest,” Canadian Gold Miner chief executive, Greg Collins, said in the statement.
The transaction gives the partners the DeSantis property, located in the heart of the Timmins Gold Camp and the possibility to grab a stake on the Catharine property.
Osisko has completed a $1 million private placement in CGM consisting 5 million units priced at $0.20, each consisting of a common share and a half common share purchase warrant exercisable at $0.35 for a period of two years.
It means the company now owns almost 20% of the issued and outstanding common shares of CGM with Transition retaining a 40% ownership interest.
Shares in Transition Metals soared on the news. The stock was up almost 15% to 15.5 Canadian cents at 9:34AM ET.
The Abitibi Greenstone Belt in Ontario, one of the world’s best known and prolific gold- and base-metal-producing areas, is once again seeing a flurry of exploration activity and re-examination of past-producing mines.
In April, Canadian precious metals producer McEwen Mining (TSX, NYSE:MUX) acquired junior exploration company Lexam VG, which gave it access to mineral properties in advanced exploration stage in the area. And in August, it bought the Black Fox mining complex in Timmins, Canada, for $35 million from Primero Mining Corp, which had invested more than $500 million, but sold it to reduce debt.