Kinross Gold has entered into an option agreement with Puma Exploration to expand its exploration efforts in Canada.

The agreement grants Kinross the option to earn a 65% interest in Puma's project near the Bathurst mining camp by funding at least $16.75m (C$23.19m) in exploration over five years.

This includes a firm commitment to drill at least 5,000m within the first 18 months, with an initial investment of $2m.

Under the terms of the partnership, Puma will remain the operator and will be assisted by a technical committee with equal representation from both companies.

Puma will receive management fees based on annual exploration expenditures.

Upon Kinross exercising the option, a joint venture will be formed, with Kinross holding a 65% interest and Puma 35%.

Both parties are required to contribute proportionally to their interests or face dilution.

If a partner's stake falls below 10%, it will convert to a 2% net smelter returns royalty, with the option for Kinross to purchase half of this for $1.5m.

Furthermore, the companies have agreed on an investor rights agreement, allowing Kinross to maintain its ownership percentage or increase it up to 19.9% in future equity financings.

The completion of the option agreement and the offering are subject to the approval of the TSX Venture Exchange.

In addition to the option agreement, Kinross has agreed to a private placement of Puma's treasury common shares, acquiring approximately 9.9% of the company for $1.01m.

The funds from this offering will be used by Puma for exploration and general corporate purposes.

Puma Exploration president and CEO Marcel Robillard said: “We believe in the region’s potential to host Canada’s next major gold camp. I am delighted to welcome Kinross, the first major gold producer to establish a presence in New Brunswick.

“I look forward to working with its first-in-class exploration and development team to grow the region’s potential”.

Last month, Kinross finished a preliminary economic assessment for its Great Bear gold project in Red Lake, Ontario.

"Kinross Gold secures a stake in Puma Exploration’s Canadian projects" was originally created and published by Mining Technology, a GlobalData owned brand.

 

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