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Brixton Metals (TSXV: BBB) has entered a joint venture agreement on its wholly owned Hog Heaven project with High Power Exploration (HPX), a privately owned mining company led by billionaire and Ivanhoe Mines founder Robert Friedland.
The Hog Heaven project is an advanced stage silver-gold-copper-lead-zinc deposit with historical production located in Flathead County, Montana. Many of the past underground mine workings where high-grade silver-gold-copper were extracted have not been drilled.
“We see high potential for further discovery at Hog Heaven. We believe that the past-producing Flathead mine, where Anaconda Copper historically produced high-grade direct-shipping silver-gold ore, is just one part of a much larger precious metals and copper system,” Graham Boyd, principal geologist of HPX, said in a press release.
Many of the past underground mine workings where high-grade silver-gold-copper were extracted have not been drilled
Under the JV agreement, High Power can earn a 51% interest in the project by making a total of $4.5 million in cash payments and incurring $15 million in exploration expenditures.
It may earn an additional 24% interest (for a total of a 75% interest) by incurring an additional $25 million in exploration expenditures, bringing total value of the transaction to $44.5 million.
Should HPX choose to complete only the first stage of earn-in, it will transfer a 2% interest in the JV to Brixton, such that the interests are 49% HPX and 51% Brixton, and Brixton shall retain a right of first offer to purchase all of HPX‘s interest.
Friedland has also agreed to a C$2 million private placement financing into Brixton, with proceeds being used to eliminate 1.5% of the existing NSR royalty on Hog Heaven held by Pan American Silver (TSX: PAAS).
Shares of Brixton Metals surged 9.7% by midday Tuesday following news of the company teaming up with Friedland. The Vancouver-based miner has a market capitalization of C$58.9 million.
