Agnico exits Quebec JV with Maple Gold, but keeps back-in option

Maple Gold Mines (TSXV: MGM; US-OTC: MGMLF) has consolidated ownership of the Douay and Joutel gold projects in southwestern Quebec after a restructuring ended its 50/50 joint venture with Agnico Eagle Mines (TSX: AEM; NYSE: AEM).

On Thursday, the parties agreed to mutually terminate the JV, first established in 2021, and transfer the properties’ legal titles to Maple. In return, Agnico will retain a 1% net smelter return royalty on the JV assets, located about 250 km north of Val-d’Or.

Maple contributed the Douay project to the JV in 2021, while Agnico pitched in Joutel. Located south of Douay, Joutel hosts Agnico’s past-producing mine complex, with total historical gold production of 1.1 million oz. at an average grade of 6.5 grams gold from 1974 to 1993,

Douay is a district-scale 357-sq.-km property with an established resource of 10 million indicated tonnes grading 1.59 grams gold per tonne for 511,000 contained oz., and 76.7 million inferred tonnes grading 1.02 grams gold for 2.53 million contained ounces.

Under the restructuring deal, Agnico retains the option to buy a 50% interest in the properties if Maple decides to develop a mine complex that is supported by a pre-feasibility or feasibility study demonstrating a $300-million net present value.

Maple Gold CEO Kiran Patankar called the restructuring a “transformative, value-unlocking transaction” that resulted from teamwork between the companies, and it represents a “win-win for both parties” for the continued advancement of the two projects.

Should Agnico exercise that option, it will be required to make a cash payment equal to the sum of 200% of the amount of specified expenditures incurred by Maple in respect of the projects, plus an additional $12 million.

In the event that construction of the project is suspended, Agnico also has the option to buy 50% of the assets upon its restart for a similar payment structure amount plus half of the project expenditures incurred following the date of the construction decision until the date of option exercise.

To fund its work on the project, Maple also announced a flow-through share offering priced at 12¢ each for gross proceeds north of $4 million. At market open, the stock traded at 6¢, giving the gold explorer a market capitalization of $20.5 million.

Both projects are situated along the Casa Berardi-Douay gold trend in Québec, a structure within the prolific Abitibi greenstone belt that is known to host world-class gold deposits such as Beatty and the Canadian Malartic.