Royalty holder Franco-Nevada Mining (TSE) is making a substantial investment in Queenston Mining (TSE) and the prolific Kirkland Lake gold camp in northeastern Ontario.
Franco-Nevada will subscribe for 1.7 million units at 60 cents per unit. A unit consists of one flow-through common share and a one-half warrant. Each of the 835,000 full warrants will entitle Franco to buy one additional non-flow-through Queenston common share for a period of 12 months from closing, at a price of $1 per share. As a result of this private placement, Franco will own 8% of Queenston’s issued equity.
“It’s really a great deal for us and a great deal for Franco,” says Queenston President Hugh Harbinson. “It will recapitalize Queenston, and it reconfirms our commitment to the region. It’s also a great deal for the people of Kirkland Lake.”
In addition to the $1-million equity purchase, Franco will pay $2 million for three Kirkland Lake gold properties owned by Queenston.
These include: the 18-claim Kirkland Lake West property, which adjoins Kinross Gold’s (TSE) Macassa gold mine; the 6-claim Gracie-St. Joseph Royalty property, in the immediate vicinity; and the 27-claim Amalgamated Kirkland property, which lies 2 miles south of the Kirkland Lake Main Break. The Amalgamated Kirkland is subject to a 70% earn-in by Cyprus Amax Minerals (NYSE) and Canadian Golden Dragon Resources (VSE), in addition to a 10% net profits interest held by Queenston.
In other news, Franco Nevada and joint-venture partner Euro-Nevada Mining (TSE) are taking steps to protect their interest in some unpatented mining claims on the Midas gold project in northern Nevada. The venture has started legal action to stop certain parties, including junior Romarco Minerals (CDN), from asserting that they have interests in land held and explored by the venture.
In response, Romarco says it has never staked ground in the area and the court action is aimed at three prospectors and a company owned by the prospectors.
The release adds the disputed ground comprises four unpatented claims known as the Bill Vest claims and another three claims known as the Evening Star claims. The dispute does not include Romarco’s five patented Midas claims adjacent to the Midas venture property, nor does the dispute include Romarco’s 7 unpatented Dixie claims.
The court action is not expected to impede development plans at the Midas venture’s Rex-Grande zone; nor will it affect exploration on other targets Midas intends to explore.
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