Grid Metals Corp. (TSXV:GRDM) (OTCQB:MSMGF) has entered into a term sheet with leading pure play battery royalty and streaming company Lithium Royalty Corp. (LRC) to finance its lithium assets in Manitoba and Ontario.
The closing of the transaction outlined in the term sheet will be subject to final due diligence of LRC and documentation. Upon closing Grid will receive 1) proceeds US$1.25 Million from the sale of a 25% interest in its lithium projects, 2) US$2.25 million from the grant of project royalties on its lithium assets and 3) C$1,650,356 from completion of a private placement from LRC with all proceeds advanced to Grid at closing. Total funding to Grid in CAD $ equivalent is approximately C$ 6.3 million. The transaction also envisions the creation of a lithium focused spin-out company.
Key terms of the transaction which pertains only to the lithium assets of the Grid are as follows:
- LRC will purchase a 2% Gross Overriding Royalty on lithium and rare metals over the Company’s Mayville Lithium Property for US$1.25 million, and on its Campus Creek Lithium Property for US$ 1 million, with proceeds to be directed to exploration on those properties.
- LRC will purchase 25% project interests (including offtake rights) in 1) the Mayville Lithium Property for US$1.25 million, and 2) the Campus Creek Lithium Property for US$250,000. Thereafter a joint venture will be established thereafter for each property with Grid and LRC funding their proportionate project interests.
- LRC will fund a 9.9% private placement into Grid calculated on a fully diluted basis at a price of 10 day VWAP preceding the announcement.
- Grid will form a new lithium subsidiary focused on exploration and development to house its lithium assets. The intention would be to list or sell this subsidiary in the future. LRC will have an option to acquire up to 20% of the new company at a commercially reasonable agreed upon price between Grid and LRC.
“With a highly prospective lithium portfolio we believe this proposed transaction with LRC will be instrumental in realising the value of our lithium assets as well as streamlining our project portfolio by creating a new lithium focused entity. In addition the transaction will improve our overall liquidity” said Robin Dunbar President and CEO of Grid.
“We believe this transaction will be in the best interests of our shareholders as LRC brings financial and technical resources to our lithium projects as well as demonstrated business contacts and acumen in the battery metals field” he added.”
LRC is a dedicated battery material investor partnering with battery material companies whose assets exhibit high grade, low cost, and key technical attributes that will help drive this once in a hundred year thematic. It is predominantly focused on investing in lithium due to extremely low obsolescence risk.
For further information please visit: https://www.gridmetalscorp.com/
