Blue Note gets more time

Blue Note Mining (bnt-v) has until the end of March to tie up its acquisition of First Gold Exploration’s (efg-v) stake in the Croinor gold project and the Matchi-Manitou property in Quebec.
The deal was originally announced last July with the closing date set for December 2010, but with the extension Blue Note now has until March 31 to make a final payment of $2.25 million.
The announcement comes just days after the company said it had closed a private placement which raised $2.3 million by issuing 9.5 million shares.
Blue Note already holds half of Croinor and would be acquiring First Gold’s 71% stake in Matchi-Maintou. Both properties are located in the Abitibi region, near Val d’Or.
The deal gives First Gold the right to maintain a 13.67% stake in Blue Note by participating in future deals. At the time the original deal was announced, First Gold said its motivation for selling came out of a desire to focus on rare-earth elements.
Thus far, Blue Note has paid just $100,000 in cash to First Gold.
The 17.5 million shares it agreed to issue as part of the deal are to be held in escrow, being released at a rate of 500,000 shares per month over 35 months from the date of closing.
Blue Note made the deal after a prefeasibility study on Croinor was completed last July. That study envisioned a 500-tonne-per-day operation producing up to 45,000 oz. gold per year
Croinor hosts a deposit with reserves of 690,000 tonnes grading 8.35 grams gold per tonne for a total of 185,000 oz. gold.
Using a 7% discount rate, the project’s net present value came in at $35.9 million with capital costs estimated at $26 million and total cost per oz. gold predicted to be US$715 per oz.