ASX-listed mining company FireFly Metals has entered an agreement to acquire 169km² of land in Canada from Gold Hunter Resources in a C$15.5m ($11.6m) deal.

The acquisition area is strategically located in relation to FireFly Metals’ existing Green Bay project in Newfoundland and Labrador Province.

The consideration includes C$500,000 in cash and C$15m to be paid in FireFly Metals’ shares.

The acquisition is aimed at positioning FireFly Metals as a key player in Newfoundland’s Baie Verte volcanogenic massive sulphide (VMS) mineral district.

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The transaction is subject to several conditions such as shareholder approval from Gold Hunter. The board has committed to vote in favour of the deal.

As per the agreement, Gold Hunter will transfer its 100% ownerships in the Rambler and Tilt Cove projects, along with the rights to the Marwan project, to its subsidiary 1451366 B.C.

Through a share purchase agreement, 1451366 B.C’s issued capital will be acquired by FireFly Metals, with the Marwan project option requiring only a C$500,000 cash payment within 30 days post-acquisition.

FireFly Metals will issue 30.3 million of its shares, valued at C$15m, based on the 20-day volume-weighted average price on the Australian Securities Exchange.

Additionally, the company will settle a C$1.5m liability of Gold Hunter by issuing shares identical to the consideration shares.

Subject to the fulfilment of conditions precedent, the deal is expected to close in February next year.

Gold Hunter president and CEO Sean Kingsley said: “We are thrilled about this agreement with Firefly Metals, as it aligns with our vision set years ago. The Baie Verte Peninsula offers tremendous potential. Our collected projects and partnerships in the district warrant an aggressive and capable team like Firefly to unlock their value. We are excited for the future growth potential with Firefly and the benefits this partnership will bring to our shareholders and community.”

FireFly Metals managing director Steve Parsons said: “We will be delighted to welcome Gold Hunter as a FireFly shareholder. They will join us on our journey as we seek to generate strong returns for our stakeholders by applying our core strengths in brownfields exploration, project development and financial management.”