Binding Agreement Reached With Australian Lithium Producer Mineral Resources Limited
New Age Metals Inc. (TSXV: NAM; OTCQB: NMTLF) has entered into a binding term sheet with a wholly owned subsidiary of Australian lithium and iron ore producer, Mineral Resources Limited (MRL). Under the terms, MRL can earn up to a 75% interest in NAM’s Manitoba lithium division.
- NAM enters into a legally binding term sheet with MRL with respect to NAM’s Manitoba lithium projects
- MRL has the right to acquire an initial 51% interest by completing C$4,000,000 of exploration and development activities and C$400,000 in cash payments within 42 months from the Effective Date
- MRL can earn an additional 14% interest (65%) by completing a NI 43-101 compliant mineral resource estimate and Pre-Feasibility Study on developing a spodumene concentrate operation at one or more of NAM’s Projects
- MRL can earn an additional 10% interest (75%) by funding the Project to the point of a final construction decision made by MRL
- NAM shall have the option to complete an initial public offering of NAM’s joint venture interest or spinning out NAM’s minority joint venture interest into a public vehicle holding such minority joint venture interest
- NAM intends to complete a maiden drill program on its Lithium Two Project in October 2021. Lithium Two hosts a historic non-NI 43-101 compliant mineral resource of 544,000 tonnes at 1.4% Li2O
“The stated mandate for our lithium division since acquisition of our projects was to secure a strategic partner with exploration, development, and production expertise, and this agreement with Mineral Resources Ltd fulfills our objective,” New Age Metals Chairman, Harry Barr, said
“Mineral Resources is one of the world’s largest lithium producers with a current market capitalization of approximately A$9 billion.
“This agreement comes at an opportune time in the market where North American lithium demand is high and there is a growing need to introduce local supply to meet that demand.
Manitoba is an underexplored region in North America for lithium and rare elements. This is a strategic transaction for New Age shareholders as it provides both, a non-dilutive financing for the development of our substantial lithium division through a partnership with one of the world’s largest producers and the flexibility to finance our share of the projects through various methods.
“Our phase one exploration plan is to complete a maiden drill programme at our Lithium Two Project and ground proof geophysical targets that were identified earlier this year.
Term Sheet Summary
The binding term sheet provides the framework by which Lithium Mineral Resources Pty Ltd, a wholly owned subsidiary of MRL, has the right to acquire up to a 75% beneficial interest in the Tenements owned by Lithium Canada Development – a wholly owned subsidiary of New Age Metals (the Tenements) as follows:
- an initial 51% interest (Initial Farm-in Interest) by completing C$4,000,000 of exploration and development activities on the Tenements (Initial Farm-in Obligation) within 42 months from the Effective Date (Initial Farm-in Period) with a minimum mandatory expenditure of C$1,000,000 of exploration and development activities within 18 months. In the event MRL earns the Initial Farm-in Interest, the parties agree to establish an unincorporated joint venture in relation to the Project (JV) on the Farm-in Date of the Initial Farm-in Interest. The JV assets will be beneficially owned by the JV parties in proportion to their JV interest. During the Initial Farm-in Period, NAM will act as manager and shall perform the Initial Farm-in Obligations under the direction of and on behalf of, MRL, and in return, charge a management fee for conducting its exploration and development activities.
- a further 14% interest (Further Farm-in Interest) by completing a NI 43-101 compliant Pre-Feasibility study on developing a spodumene concentrate operation at one or more of the Projects, including the completion of a compliant resource statement (Further Farm-in Obligation) within five years from the Effective Date (Further Farm-in Period); and
- a final 10% interest (Final Farm-in Interest) by funding the Project to the point of a final construction/investment decision (FID) made by MRL (Final Farm-in Obligation, and collectively with the Initial Farm-In Obligation and the Further Farm-in Obligation, the Farm-In Obligations) within seven years from the Effective Date (Final Farm-in Period).
For further information please visit: https://newagemetals.com/
