Canada's Discovery Signs US$55 Million Deal to Acquire Gold Mining Assets

en.Wedoany.com Reported - On October 9, Canada's Discovery Mining announced that its subsidiary Dome Mine Ltd. has signed a formal asset acquisition agreement with a McEwen-related subsidiary to acquire the Fuller Gold Project in the Timmins area of Ontario, a 60% interest in the Paymaster joint venture project, and a surface land interest for US$55 million. The consideration consists of US$5 million in cash and US$50 million in Discovery Mining common shares, with closing expected in October 2026.

The Fuller Project covers approximately 210 hectares and is wholly owned by McEwen's subsidiary Lexam VG Gold; the Paymaster Project covers approximately 179 hectares and is currently jointly held by Lexam VG Gold and Dome Mine Ltd. Upon completion of the transaction, Discovery Mining will acquire full interest in the Fuller Project and increase its stake in the Paymaster joint venture to 100%. The acquisition also includes a surface land interest held by McEwen's subsidiary VG Holdings.

The two mining assets are adjacent to Discovery Mining's existing Dome Gold Mine. The company plans to use the newly acquired land for subsequent mining facility development, including the construction of a new ore processing plant and tailings storage facilities. The Dome Gold Mine currently hosts approximately 11 million ounces of inferred gold resources. The company plans to resume mine production within the next five years using the existing Dome Mill, with a long-term plan to expand processing capacity through additional mineral processing facilities.

Discovery Mining has also signed an amended mining royalty agreement with Franco-Nevada Canada Holdings, extending the royalty coverage of the existing Porcupine mining assets to the assets to be acquired in this transaction. Under the agreement, Franco-Nevada will pay Discovery Mining US$8 million upon completion of the acquisition, and the related royalty arrangements will be implemented in accordance with the amended agreement.

The share consideration for this transaction will be determined based on the volume-weighted average share price on a designated trading day prior to closing, with the relevant US dollar amounts converted to Canadian dollars at the applicable exchange rate. The shares issued to McEwen will be subject to a four-month-and-one-day statutory hold period. Closing is also subject to completion of mining title transfers, release of the existing net smelter return royalty on the Fuller Project, and approval of the share issuance by the Toronto Stock Exchange.

McEwen plans to deploy the proceeds from the transaction into its existing mine operations and development projects. The company also disclosed that it has obtained US$13.5 million in cash through the assignment of a previously held McEwen Copper loan receivable.