James Bay Minerals (ASX:JBY) has executed a definitive term sheet to purchase the 627-acre Independence Gold Project in Nevada, US.
The Independence Gold Project sits adjacent to Nevada Gold Mine’s Phoenix Project, and is currently owned by Independence Mining, an incorporated joint venture between Battle Mountain Resources (BMR) and Americas Gold Exploration.
James Bay, which has a market capitalisation of $12.14 million, has agreed to acquire 100% of BMR for $2.43 million worth of shares at $0.15 each, subject to securing shareholder approval and completing a $1.5 million placement.
Following today’s news, James Bay Minerals’ share price spiked 65% to $0.33 per share as of 1.15pm AEDT.
Through the BMR acquisition, James Bay will acquire a 51.54% interest in the Independence Gold Project. As part of the agreement, the company also has the right to acquire Americas Gold Exploration’s interest via an earn-in agreement.
James Bay will issue 2 million shares to Americas Gold, as well as incur at least US$1.5 million ($2.2 million) in exploration expenditure at the project within one year.
Upon completion and within 45 days of the stage one end date, James Bay must issue US$500,000 worth of shares to Americas Gold based on the volume weighted average price (VWAP) of its shares over the 30 days prior to the date of issue.
After these requirements are completed, James Bay’s interest in the project will total 75%.
To earn the final 25% interest, James Bay must incur a further US$1.5 million in exploration expenditure at the project within one year and, within 45 days of the stage two end date, must pay US$1.5 million to Americas Gold.
A cash fee of US$2 million is also payable to Americas Gold within 12 months of the start of production. If production begins within five years, James Bay may elect to satisfy US$1.5 million of this amount through the issue of shares based on the 30-day VWAP.
During the earn-in period, James Bay will also sole fund operations at the project and will have the right to determine the nature, location, timing, and conduct of all such operations including exploration and development.
Executive Director Andrew Dornan says this acquisition gives the company an opportunity to enhance its existing asset base in North America with a “substantial high-grade” gold asset with growth potential.
“This is an exceptional opportunity for our shareholders and we are extremely fortunate to have secured this acquisition and earn-in at the Independence Gold Project,” Dornan says.
“The combination of existing high-grade resources, significant growth potential at both the near-surface and skarn deposits, and a location in one of the best mining districts globally presents a huge opportunity for the company.
“We are very excited about what this transformational deal brings to James Bay Minerals.”
In parallel to the acquisition, James Bay is conducting a placement of 10 million shares at $0.15 per share to raise $1.5 million.
The issue price represents a 25% discount to the last closing price on 10 October 2024 of $0.20 per share.
Wagtail Capital will act as the lead manager and bookrunner for the placement.
Subject to shareholder approval, directors Andrew Dornan, Dean Ercegovic, and Gerard O’Donovan will subscribe for $100,000, $50,000, and $25,000 under the placement, respectively.
Proceeds will be used for exploration and development on the company’s existing projects, as well as on the Independence Gold Project.
James Bay Minerals is a Canada-focused lithium explorer that wholly owns 346km2 of prospective lithium projects within the James Bay region of Québec.
Write to Aaliyah Rogan at Mining.com.au
Images: James Bay Minerals
