FireFly to unlock value from Pickle Crow Gold Project by sale for up to A$86.1M

Executive Summary

• FireFly Metals Ltd has entered into a binding agreement to sell its Ontario Gold Assets (Pickle Crow Project and Sioux Lookout Project) to Bellavista Resources Ltd for a total deemed aggregate value of up to A$86.1 million.
• The transaction involves an upfront consideration of 60 million Bellavista shares (valued at A$47.4m) and contingent performance rights worth up to A$38.7m, subject to specific exploration and production milestones.
• FireFly shareholders will receive an in-specie distribution of Bellavista shares, with an expected ratio of 1 Bellavista share for every 12.8 FireFly shares held, potentially resulting in FireFly shareholders owning up to ~40% of Bellavista post-completion.

Key Details

• Transaction Structure: FireFly sells all issued share capital in Auteco Minerals (Canada) Pty Ltd (which holds the Ontario Gold Assets) and assigns intercompany loans receivable to Bellavista.
• Assets Sold:
  • 70% interest in the Pickle Crow Project (with right to acquire additional 10% for 80% total interest).
  • 100% interest in the Sioux Lookout Project.
• Consideration Breakdown:
  • Upfront: 60 million fully paid ordinary Bellavista shares (Deemed value: A$47.4m).
  • Contingent: 50 million Bellavista performance rights (Deemed value: A$38.7m).
  • Total Deemed Value: Up to A$86.1 million.
• Contingent Milestones (Performance Rights):
  • Milestone 1 (30 million rights): Vest upon Bellavista completing 10,000m of drilling at Pickle Crow within 5 years. Expected to vest within 12 months of completion, increasing FireFly's interest to no less than 9.9%.
  • Milestone 2 (6.7 million rights): Vest upon announcing a minimum 5 million ounce Mineral Resource Estimate (Inferred or higher) at a minimum grade of 5g/t gold within 5 years. Cash settlement option: A$5,000,000.
  • Milestone 3 (13.3 million rights): Vest upon producing at least 200,000 ounces of gold from the assets within 5 years. Cash settlement option: A$10,000,000.
• In-Specie Distribution:
  • FireFly will distribute the 60 million upfront Bellavista shares to eligible shareholders.
  • Ratio: 1 Bellavista share for approximately every 12.8 FireFly shares held.
  • FireFly retains the contingent performance rights; these are not distributed to shareholders.
• Post-Transaction Ownership: FireFly and its shareholders have the potential to own up to ~40% of Bellavista, combining the upfront shares and potential conversion of performance rights.
• Bellavista Capital Raising: Bellavista intends to raise ~A$25m (before costs) to drive resource growth and exploration at the Ontario Gold Assets.
• Management: Bellavista is led by Glenn Jardine and Peter Canterbury, former executives of De Grey Mining Ltd.
• Conditions Precedent:
  • Shareholder approvals from both FireFly and Bellavista.
  • ASIC relief from Corporations Act requirements.
  • ATO Class Ruling on tax treatment.
  • Consent from First Mining Gold Corp. to waive rights under the PC Gold joint venture agreement.
  • Bellavista to pay C$3,000,000 to First Mining to exercise the option to increase Pickle Crow interest to 80%.
• Timeline: Completion expected around early April 2026, subject to conditions. Shareholder meetings expected around late-March 2026.
• Advisers: BMO Capital Markets and Canaccord Genuity (FireFly financial advisers); Hamilton Locke (Australian legal); Osler, Hoskin & Harcourt LLP (Canadian legal).

Notable Quotes

• "The Transaction is value accretive and enables eligible FireFly shareholders to directly participate in the future performance of Bellavista while allowing FireFly to crystalise value for non-core assets."
• "FireFly considers there to be strong strategic rationale for the Transaction, as it enables FireFly shareholders to retain exposure to the Ontario Gold Assets through their shareholding both in Bellavista and in FireFly... while FireFly focuses its efforts on accelerating the development of the world class Green Bay Copper-Gold Project."