Duluth Metals, Ltd., announced Monday that it has entered into an agreement to purchase Spokane Valley, Washington-based Franconia Minerals Corporation in a deal valued at about $75.6 million.

Under the agreement, Duluth Metals will purchase all outstanding shares of Franconia Minerals for 89 cents per share, a 46 percent premium from Franconia's Friday closing price of 61 cents per share.

Franconia has a 70 percent interest in the Birch Lake, Maturi, and Spruce Road deposits in northeastern Minnesota-called the Birch Lake Project-and announced last month that it plans to increase its ownership in the project to 82 percent.

Once the deal with Duluth Metals closes, the Birch Lake Project assets will be transferred to Twin Metals Minnesota, LLC (TMM)-a joint venture between Duluth Metals and Antofagasta, PLC, a copper mining company.

TMM was formed to pursue the development and operation of a copper, nickel, and platinum group metals mining project within the Nokomis Deposit in northeastern Minnesota, which is in close proximity to the Birch Lake Project.

“Franconia's assets are an excellent fit with the Nokomis Deposit and we are very pleased to enter into this agreement through TMM, our joint venture with Duluth,” Marcelo Awad, CEO of Antofagasta, said in a statement. “We are looking forward to advancing the development of these promising assets.”

Antofagasta will contribute about $29.5 million in cash to Duluth Metals' acquisition of Franconia. Antofagasta and Duluth Metals will maintain their 60 percent and 40 percent interests, respectively, in TMM.

Franconia's board of directors unanimously approved the deal, which is subject to the approval of at least two-thirds of the votes cast by Franconia shareholders at a special meeting, which is expected to take place in February.

According to Ernie Lehmann, who cofounded and led Franconia, funding has been a challenge for the company but it received a $4.2 million private placement by U.S. and Canadian investors earlier this year.

The Nokomis Deposit is part of the Duluth Complex, a crescent-shaped territory north of Duluth and on the northern end of the Mesabi Iron Range. The region holds at least 4.4 billion tons of crude ore containing copper, nickel, and other precious metals, according to the Minnesota Department of Natural Resources.

In addition to Duluth Metals and Franconia, four other companies are exploring deposits in the Duluth Complex: Vancouver-based Teck Metals, Ltd., London-based Kennecott/Rio Tinto, Denver-based Encampment Minerals, and British Columbia-based PolyMet Mining Corporation.

PolyMet announced last week that it is nearing a deal with Iron Range Resources that could grant the mining company a $4 million loan and give the state agency a stake in the company.