Liberty Mines Inc.
, Stock Forum
) has entered into a definitive agreement with QMX Gold Corp.
, Stock Forum
) to acquire the Snow Lake gold project in Manitoba.
The Snow Lake property's assets include the New Britannia Mine with associated plant, infrastructure, and equipment.
According to the Liberty Mines press release
, upon completion of the transaction, which is expected to close on or about Nov. 25, 2013, Liberty Mines will have immediate medium-term growth potential targeting 80,000 ounces of gold per year at the Snow Lake property, with projected total cash costs estimated at $852 per ounce gold.
Liberty will also have measured and indicated resources of 5.47 million tonnes grading 4.14 grams per tonne gold for 728,000 ounces of contained gold; and additional inferred resources of 2.37 million tonnes grading 4.43 grams per tonne gold for 336,700 ounces of contained gold.
Proven and probable reserves from these resources are calculated to be 3.5 million tonnes grading 4.04 grams per tonne gold for 451,900 ounces of contained gold.
After the transaction, Liberty will also have two mills, the 1,500 tonnes per day capacity Redstone Mill in Timmins, Ontario and the 2,150 tonnes per day capacity Snow Lake Mill in Snow Lake, Manitoba.
Liberty Mines has entered into a definitive agreement with QMX Gold to acquire a 100% interest in the Snow Lake property through the acquisition of QMX's subsidiary, in consideration for a cash payment of US$20 million to QMX. A deposit in the amount of USD$1.0 million shall be released from escrow and paid to QMX in the coming days.
The remaining purchase price of US$19 million shall be paid upon closing of the transaction, which is expected to occur on or before Nov. 25, 2013.
Liberty may extend closing until Jan. 14, 2014 by paying to QMX an extension fee in the amount of US$100,000.
Liberty is focused on the exploration, development and production of nickel and related base metals from its assets in Ontario, Canada.
On Wednesday, Liberty was trading at $0.60 a share. The company had a market cap of $2.5 million, based on 4.1 million shares outstanding.