FinnAust Mining takes over Cairn Energy´s Avannaa subsidiary

FinnAust Mining announced the purchase of Greenland-focused Avannaa through an all-share deal, giving it access to new low-cost, high-quaility assets.

The miner would pay Capricorn Oil, a subsidiary of Cairn Energy, $500,000 through the issuance of new shares.

Significantly, two of Avannaa´s projects, Disko-Nuussuaq and Kangerluarsuk SedEx, had already been the subject of over $50m of technical work by blue-chip mining outfits, FinnAust said in a statement.

Furthermore, Avannaa´s projects carried no financial commitments with them for 2016 and were either in or heading into expenditure holidays.

Disko included what the company labelled as a "masive" 28 tonne sulphide boulder, including seven large-scale magmatic nicke-copper-PGE conductor targets.

FinnAust, which was backed by Western Areas, the Australian nickel producer, would continue to focus on the Pituffik titanium mineral sands, the company said in a statement.

Nevertheless, "the acquisition of the assets gave FinnAust a low cost option on a recovery in base metals prices and new investigation of the substantial data collected may reveal new value within each project," house broker SP Angel said in a research note sent to clients.

As of 1225 BST shares in FinnAust were trading higher by 5.65% to 5.80p, having hit an intra-session high of 6.0p.