FireFly Metals (ASX:FFM) announced a strategic divestment of its Ontario gold assets to Bellavista Resources (ASX:BVR) in a deal valued at up to $86.1 million.
The transaction focuses on FireFly’s 70% stake in the Pickle Crow Gold Project and its 100% interest in the Sioux Lookout Project.
The move allows FireFly to sharpen its focus on its flagship Green Bay Copper-Gold Project while ensuring its shareholders retain significant exposure to the Ontario assets' upside.
Under the terms of the agreement, FireFly will receive an upfront consideration of 60 million Bellavista shares (valued at $47.4 million) and a further 50 million performance rights (valued at $38.7 million) contingent on specific exploration milestones.
Pending shareholder approval, FireFly plans to execute an in-specie distribution of the upfront shares directly to its investors.
The process is expected to provide FireFly shareholders with approximately one Bellavista share for every 12.8 FireFly shares held, ultimately resulting in FireFly and its shareholders owning up to 40% of Bellavista.
Bellavista, led by the seasoned management team behind De Grey Mining's success, intends to raise $25 million to fund an aggressive exploration program at the Ontario sites.
At the time of reporting, FireFly Metals' share price was $1.96.