Weekly Nugget

Orion Mine Finance Group to Acquire 50%-Interest for $225M in Greenstone Gold Mines, Ontario

The Greenstone Gold Mines Partnership is developing the Hardrock mine gold project in Northern Ontario.

Premier Gold Mines (TSX: PG) and Centerra Gold (TSX: CG) has an agreement with Orion Mine Finance to acquire Centerra’s 50% interest in the Greenstone Gold Mines Partnership for $225 million plus payment obligations of ~$75 million.

As of 2019, it was estimated that the Hardrock open-pit deposit hosted 68.85 million tonnes at 1.33 g/t Au in measured and indicated resources, while the Hardrock underground deposit was estimated to host 4.90 million tonnes at 3.93 g/t Au in measured and indicated resources.

This deal helps to clear the pathway development, resolving a legal fight between Premier and Centerra. The two companies came to head over whether the Hardrock project had reached a feasibility stage. Premier had attempted to buy Centerra’s stake with a $205-million offer. 

In the past, Premier declared that Hardrock was “shovel ready” with both federal and provincial environmental assessment approvals, an updated mine closure plan filed, and signed agreements with nearby First Nation communities.

Once the deal closes next month, Orion intends to fund a feasibility study for the Hardrock project as the basis for a construction decision, ending all the legal actions between Premier and Centerra. 

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Equinox Offers C$611M for Premier Gold Mines

Equinox Gold (TSX: EQX) announced plans to acquire all the outstanding shares in Premier Gold (TSX: PG) in an all-share transaction roughly valued at ~C$611.7 million.

The proposal will see Premier shareholders receive 0.1967 of an Equinox Gold share and 0.4 of a share of i-80 Gold for each Premier share held. 

In the deal comes a 50% interest in the multi-million-ounce Hardrock Project through a joint venture between Equinox Gold and Orion Mine Finance. 

At the same time, Premier will spin-out a newly created US-focused gold production and development company to be called i-80 Gold Corp.

This new company will own Premier's South-Arturo and McCoy-Cove properties and will complete Premier's announced acquisition of the Getchell Project; all the properties are in Nevada

Premier shareholders will own 16% of Equinox Gold once the deal is complete as well as 70 percent of the shares of i-80 Gold. Equinox Gold will own the remaining 30%of i-80 Gold.

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Rio’s Plans for 2022 Production at Oyu Tolgoi, Mongolia

Rio Tinto (ASX, LON, NYSE: RIO) announced that it expects production from the much delayed Oyu Tolgoi copper-gold project in Mongolia is set to come into production by October 2022. This is after a review of an expansion project that faced technical challenges. 

The mine has been plagued by stability issues which translated into as much as $1.9 billion in extra costs, delaying production and prompting a new feasibility study. 

In July, 2020, Turquoise Hill (TSX: TRQ), Rio Tinto’s partner at Oyu Tolgoi, completed the new feasibility study, which included a new mine design for Hugo North Lift 1 Panel 0  which reduced the mineral reserve estimates for the Hugo North underground mine. 

Total proven and probable reserves mount to 1,272 Mt at 0.81% Cu, 0.29 Au g/t and 1.87 Ag g/t, for 10.3 million tonnes of copper, 11.9 million ounces of gold and 76.6 million ounces of silver.   

Rio has repeatedly said the underground expansion is its most important growth project. Once completed, it would place Oyu Tolgoi among the top four copper mines, producing 480,000 tonnes a year from 2028 to 2036.

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First Cobalt Receives Funding for First North American Cobalt Refinery, Ontario

First Cobalt Corp. (TSX-V: FCC) has secured C$10 million in government loans and grants, allowing the company to advance the construction of a cobalt refinery in Ontario.

Under the funding agreements, the Canadian government will provide a C$5 million interest-free loan to First Cobalt, while the Ontario government will provide a C$5 million non-repayable grant.

The plant which sits ~600 km from the American border, would be the sole producer of refined cobalt in North America. Glencore will provide the feedstock for the refinery.

Once complete, the facility will be capable of producing 25,000 tonnes of battery-grade cobalt sulfate each year, which could represent 5% of the global market for refined cobalt, according to First Cobalt.

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Energy Benchmarking for Mining Comes to Canada

Canada’s federal department of natural resources (NRCan) along with MiTRAQ, CanmetMINING and the Office of Energy Efficiency have launched a platform to anonymously compare energy efficiency at different mine sites in Canada. 

MiTRAQ allows mining companies signed up for the platform to perform custom benchmarking to improve their operational efficiency. The goal of the program is to promote energy efficiency and help the mining industry work towards a low-carbon future. 

NRCan will subsidize licenses for mining companies to access the Energy Benchmarking Program until June 2021. A company can enter data for multiple sites with a single license.

The prerequisites for free enrollment include the location of at least one mine site in Canada and registration in the Canadian Industry Partnership for Energy Conservation (CIPEC). 

Applications for enrollment are accepted until January 15, 2021.

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