LONDON (Alliance News) - Shares in FinnAust Mining PLC receieved a boost on Monday after the company revealed it could be on the cusp of significantly expanding its footprint in Greenland after agreeing to acquire Avannaa Exploration Ltd.
FinnAust said it has entered into an agreement to acquire the entire issued and to be issued share capital of Avannaa Exploration from Capricorn Oil Ltd, a subsidiary of London-listed Cairn Energy PLC, for a total consideration of GBP500,000.
The consideration will be settled in shares, which will be priced "equal to the volume weighted average price" of FinnAust shares for the trading days for the period starting from the signing of the agreement and the necessary approvals being received, minus 5.0%.
Avannaa Exploration is a mineral exploration company with several advanced projects in the south-west of the country. Two of the projects "are of particular interest", namely the Disko-Nuusssuaq magmatic massive sulphide nickel, copper and platinum project and the Kangerluarsuk SedEx lead, zinc and silver project.
Disko-Nuussuaq has a 28.0 tonne massive sulphide boulder assaying 7.0% nickel, 3.0% copper and 2.0 parts per million platinum group metals and there are seven conductor targets confirmed.
Kangerluarsuk SedEx has produced results from previous drilling including 41% nickel, 9.3% lead and 596.0 grammes of silver per tonne of ore.
FinnAust said the projects complement its stated strategy of acquiring low cost, high quality assets as both projects have minimal exploration commitment and low administrative holding cost due to historical expenditure credits.
The primary focus, however, will remain on the Pituffik titanium project that also lies in Greenland, where it is aiming to complete a bulk sampling programme in 2017.
FinnAust shares were trading up 6.5% to 5.70 pence per share on Monday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Capricorn Energy PLC (CNE)