Tickers: XTSX:FTR
Tags: Mining
-Firesteel's total holding of Nordic Mines Marknad AB is now 60%
-Firesteel intends to issue approximately 58,391,515 Firesteel common shares to acquire the remaining 40% of Nordic Mines Marknad within 3 months.
-Production is expected to restart during summer of 2018
Vancouver, BC / TheNewswire / December 11, 2017 - FIRESTEEL RESOURCES INC. (TSX-V: FTR) ("Firesteel" or the "Company") today announced that it has closed the Joint Venture Agreement (the "JV Agreement") with Nordic Mines AB ("Nordic") (announced on Sept 11, 2017) and now owns a controlling 60% interest in Nordic Mines Marknad AB ("Marknad"). In addition, Firesteel has received the US$20,600,000 in funds under the Prepaid Forward Gold Purchase Agreement ("PPF Agreement") with PFL Raahe Holdings LP ("PFL") (announced on November 14, 2017). PFL is a limited partnership organized under the laws of the Province of Ontario and an investment vehicle controlled by Pandion Mine Finance, LP ("Pandion").
The vast majority of such funds received are being invested in Nordic Marknad and Nordic OY, with the balance being funded into Firesteel.
Under the JV Agreement, Firesteel will be the operator of the Laiva Mine and intends to soon acquire the remaining 40% of the equity in Nordic Marknad in exchange for Firesteel common shares. The shares issued under the proposed 40% buy-out transaction will initially be issued to NOMI, but it is intended that such shares of the Company will ultimately be distributed to the shareholders of NOMI pro rata.
The proceeds of the PPF Agreement will be substantially used to fund the restart of production at the Laiva Mine and the payment of certain outstanding creditor obligations including all obligations under the existing composition plan involving Nordic OY.
Production is expected to resume in 6-8 months.
Commenting on these developments, Michael Hepworth, President and CEO of Firesteel stated, "Now that we have closed this deal, production is our primary focus. As a result, the Firesteel team will be in Finland on 3rd of January and will immediately kick-off the already developed work plans, to restart the mine. Most of the management team are in place and this team will begin work immediately restarting the mine. Production is expected to start during the summer of 2018."
Funds will be allocated to the acquisition of additional capital equipment to update and refine existing infrastructure, efficiency upgrades, debt reduction and the commencement of mining operations.
The Company has received conditional approval from the TSX-V for the transactions contemplated by both the JV Agreement and PPF Agreement.
About the Company
Firesteel is an exploration-stage junior mining company engaged in the acquisition and exploration of prospective precious and base metal properties in Canada and stable jurisdictions around the world. Firesteel is currently working to evolve from an exploration company to becoming a junior producer.
On April 7, 2017, Firesteel first announced the signing of heads of agreement with Nordic Mines AB to form a joint venture to operate and eventually acquire 100% of Nordic Mines Marknad, a wholly owned subsidiary of Nordic Mines AB. Nordic Mines Marknad owns 100% of Nordic Mines OY, the operator of the fully permitted and past producing Laiva Mine near Raahe in Finland.
Firesteel recently completed an updated 43-101 resource estimate prepared in accordance with NI 43-101 guidelines and CIM standards (Firesteel Press release dated August 21, 2017). The results of that study include:
Laiva Open Pit Constrained Mineral Resource Estimate
Classification | Au g/t | Tonnes | Contained Au (troy ozs) |
Measured | 1.132 | 355,000 | 13,000 |
Indicated | 1.248 | 3,442,000 | 138,000 |
Measured + Indicated | 1.237 | 3,797,000 | 151,000 |
Inferred | 1.531 | 9,030,000 | 445,000 |
The mineral resources presented here were estimated using a block model with a block size of 9 m by 9 m by 9 m sub-blocked to a minimum of 3 m by 3 m by 3 m using ID3 methods for grade estimation. All mineral resources are reported using a pit constrained gold cut-off of 0.40 g/t Au.
Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, socio-political, marketing, or other relevant issues.
-Nordic Mines OY
-Historical expenditures estimated at over EUR200,000,000
-250 tonne per hour autogenous Outotec mill
-Cyanide leaching circuit
-First dore cast in 2011
-Conventional open pit mine
-Excellent local infrastructure
-2 additional early stage gold properties in Finland.
Disclosure: Companies typically rely on comprehensive feasibility reports on mineral reserve estimates to reduce the risks and uncertainties associated with a production decision. The Company has not completed a feasibility study on, nor has the Company completed a mineral reserve estimate at the Laiva Mine and as such the financial and technical viability is deemed to have higher risk than if this work had been completed. Based on historical engineering and geological reports, historical production data and current engineering work completed or in process by Firesteel, the Company intends to move forward with the development of this asset.
The Company further cautions that it is not basing any production decision on a feasibility study of mineral reserves demonstrating economic and technical viability, and therefore there is a much greater risk of failure associated with its production decision. In addition, readers are cautioned that inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves.
Firesteel currently has one highly prospective property in British Colombia.
The Star property is currently operated under a Joint Venture agreement between Firesteel (49%) and Prosper Gold. (TSX-V: PGX) (51%).
About Pandion Mine Finance, LP
Pandion is an affiliate of PFL Raahe Holdings LP and is a mining-focused investment firm backed by MKS PAMP Group and Ospraie Management, LLC that provides flexible financing solutions to developing mining companies.
Qualified Person
The scientific and technical information in this news release has been reviewed and approved by Paul Sarjeant, P.Geo., a Qualified Person under National Instrument 43-101 and a director of the Company.
For a detailed overview of Firesteel Resources Inc. please visit:
For further information, please contact:
Michael Hepworth
President and Chief Executive Officer
(416) 419 5192
mhepworth@firesteelresources.com
www.firesteelresources.com
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Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release
Advisory Regarding Forward Looking Statements
This news release contains forward-looking statements. Users of forward-looking statements are cautioned that actual results may vary from forward-looking statements contained herein. Forward-looking statements include, but are not limited to: expectations, opinions, forecasts, projections and other similar statements concerning anticipated future events, conditions or results that are not historical facts. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". While the Company has based these forward-looking statements on its expectations about future events as at the date those statements were prepared, the statements are not a guarantee of the Company's future performance. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurance that such expectations will prove to be correct.
The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement and are made as of the date of this new release. Unless otherwise required by applicable securities laws, the Company does not intend nor does it undertake any obligation to update or review any forward-looking statements to reflect subsequent information, events, results or circumstances or otherwise.
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