On August 26, 2020, Jaguar Mining Inc. (TSX:JAG) announced that it has signed an earn-in option agreement (the “Iron Quadrangle Agreement”) with IAMGOLD Corporation (TSX:IMG) on a package of 28 mineral exploration tenements (the “Mineral Property Package”) covering an area of approximately 27,141.75 hectares in the prolific Iron Quadrangle region, located in Minas Gerais, Brazil. The Iron Quadrangle Agreement stipulates that Jaguar has the option to earn an initial 60% interest in the Mineral Property Package by spending USD$6.0 million in exploration expenditures on the Mineral Property Package over four years commencing in the third quarter of 2020. The earn-in period will include a minimum expenditure by Jaguar of USD$500,000 per annum, and the exploration program must include the completion of a minimum of 5,000 meters of diamond drilling over the option agreement time frame.
Upon Jaguar vesting an initial 60% interest, IAMGOLD may elect to participate and fund its pro-rata share of ongoing expenditures under a conventional 60/40 incorporated joint venture structure that will be formed for this purpose. Jaguar will be the project operator of the joint venture and will be subject to oversight by a technical committee with representatives from both parent companies. Once the joint venture company is in place, both parent companies will be required to fund their pro-rata share for ongoing expenditures or be subject to dilution. Should either party dilute to <10% interest, their interest will revert to a 1.5% net smelter royalty (NSR).
Jaguar Mining Inc. is a Canadian-listed junior gold mining, development, and exploration company operating in Brazil.
Miller Thomson advised Jaguar with regard to the Iron Quadrangle Agreement with a team led by Geoff Clarke (Capital Markets/Securities; Corporate/M&A; and Mining).