Azincourt Energy Corp. said Dec. 11 that it signed a nonbinding letter of intent for the acquisition of up to a 100% stake in five projects in Manitoba from New Age Metals Inc., along with the projects' holding company.
The five projects, Lithium One, Lithium Two, Lithman West, Lithman East and Lithman North, are held by New Age Metals' Canadian Lithium Development, and Azincourt must complete due diligence and execute a binding agreement no later than Jan. 15, 2018, to proceed with the option deal. Lithium One, Lithium Two and Lithman West are drill-ready.
Under the LOI, Azincourt may acquire an initial 60% stake in the properties by paying C$200,000 in four equal cash payments over 18 months and issuing up to 1 million common shares in four tranches by the third anniversary of the definitive agreement. The deal also requires Azincourt to complete about C$2.9 million in exploration expenditures at the projects over three years.
Within 90 days of Azincourt's 60% earn-in, New Age Metals will have the option to enter into a joint venture and keep its 40% stake in the properties. Should New Age Metals forego the joint venture option, Azincourt will have to issue an additional 1 million shares to New Age Metals within 15 days of its decision on the venture and spend C$1 million more on any of the projects as long as all five properties are in good standing.
The properties will be subject to a 2% net smelter royalty, but failure to complete the additional spending requirement will keep Azincourt's stakes in all five projects at 60%. The property option remains subject to a number of conditions, including definitive deals and regulatory approvals.
