Nordic Mines AB said June 8 that it signed a memorandum of understanding with Firesteel Resources Inc. to establish a joint venture.
Nordic Mines Marknad AB, currently a wholly owned Nordic Mines subsidiary, will hold all of the company's prospecting licenses and exploitation properties.
Nordic Mines will contribute the properties, the mill and the licenses for 49% of the joint venture, while Firesteel will contribute C$18 million, an operating team and expertise for a 51% stake.
The joint venture company will be run by five directors, three of whom will be appointed by Firesteel, with the other two to be appointed by Nordic Mines.
The companies intend to distribute any profits resulting from gold production in the form of dividends.
Nordic Mines and Firesteel aim to sign legally binding documentation by June 25, with Firesteel expected to contribute the C$18 million by Aug. 25.
Nordic Mines also reported that, due to the Firesteel agreement, its 51 million Swedish kronor rights issue will not be supported by shareholder Lau Su Holding AB. Lau Su signed the MOU and agreed to support a 51/49 joint venture.
In April, Nordic Mines and Firesteel signed a heads of agreement enabling the latter to acquire a majority stake in Nordic Mines' Laiva gold property in Finland, aiming to bring the operation back into production.