Vancouver's NovaGold Resources Inc. (TSX, AMEX:NG) is selling its 51% interest in Alaska's Ambler mining project along with its early stage properties in the state for $20 million in common shares of a Vancouver-based junior miner.
Under the agreement, Mantra Mining Inc. (TSX-V:MAN) will issue 6.25 million in common shares, or $10 million, to NovaGold at the transaction's close.
An additional 6.25 million common shares will be issued to NovaGold within 15 months of the transaction's close.
Mantra will also reimburse NovaGold for up to $2 million in expenses for the Ambler Project, a copper-zinc polymetallic mine in Alaska, from June 1 up to the date the deal is finalized.
The divestments are part of NovaGold's plan to focus on its major mines projects in Alaska and its Galore Creek mine in northern B.C.
NovaGold, which will become Mantra's single largest shareholder, is reviewing further divestitures, including its stake in other mining projects or the sale of the company as a whole.
Under a separate agreement with affiliates of Rio Tinto PLC, Mantra will buy a 100% interest in the Ambler project for shares and future cash payments that total US$29 million over 24 months.
NovaGold's share price range during the past week: between $6.53 and $6.88; 52-week high: $19.99; 52-week low: $5.90.