Kinross takes stake in Puma Exploration, sending stock up 50%

Kinross Gold (TSX: K, NYSE: KGC) has expanded its exploration footprint in Canada by investing in New Brunswick-focused junior Puma Exploration (TSXV: PUMA) and its properties near the province’s Bathurst mining camp.

Under an option agreement signed Thursday, Kinross can earn a 65% interest in Puma’s Williams Brook, Portage and Jonpol properties by spending at least $16.75 million on exploration during a five-year period. The deal includes a firm commitment of $2 million for at least 5,000 metres of drilling within the first 18 months. Puma will remain the project operator during this period.

Marcel Robillard, Puma’s CEO, said that most of the initial $2 million in spending will be directed towards the company’s flagship Williams Brook property.

“Kinross’s commitment represents a stamp of approval on Williams Brook’s potential, and having Puma as the operator speaks to Kinross’s confidence in the strength of our exploration team,” Robillard said.

Kinross will also purchase 16.9 million of Puma’s shares at 6¢ per share for roughly $1 million, giving it a 9.9% stake in Puma.

Since 2021, Puma has spent $12.5 million on exploring the property and made several gold discoveries. Its current focus is on the high-grade Lynx zone, where drilling has returned results up to 5 grams per tonne gold over 50.2 metres. The mineralization at Lynx has so far been traced over a distance of 750 metres along strike, a width of 100 metres and a depth of 200 metres.

Combined with its Portage and Jonpol properties, Puma’s land pacakge covers more than 490 sq. km of prospective gold holdings near the Rocky Brook Millstream Fault, a major regional structure responsible for the gold deposition in the region.

“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,” Robillard said in Thursday’s news release. If Kinross exercises its option, the companies would form a 65/35 joint venture.

Shares of Puma Exploration gained 3¢ or 50% to 9¢ this afternoon in Toronto following the announcement. This gives the gold junior a market capitalization of $13 million.