Mountain Lake Minerals Inc.'s share price jumped more than 150% on March 15 after it announced a letter of intent to acquire 1151024 B.C. Ltd. and plans to spin out its mining assets to existing shareholders.
The company said 1151024 B.C. is a private company doing business through Active Health Products Ltd. with plans to produce medical marijuana.
According to the company, Active Health is pursuing a license application on a half acre of land to build a facility covering 11,000 square feet. The facility is expected to be completed within six months of the start of construction, which has yet to occur.
Existing Mountain Lake shareholders are expected to retain at least 10% of the resulting company, and 1151024 B.C. will be able to appoint two additional members to the board, with specific terms remaining subject to further negotiation.
The deal also remains subject to a 10-for-1 share rollback and the completion of the spin out of Mountain Lake's mining assets.
The private company agreed to pay C$250,000 to cover Mountain Lake's accounting and general operating expenses, with C$50,000 paid on execution of the letter of intent and the remainder paid on signing of a binding agreement.
1151024 B.C. will also help raise C$1 million for the proposed spinout, earmarked for operations and continued exploration as well as to pursue a listing on the TSX Venture Exchange.
Mountain Lake's current mining assets include the Glover Island and Little River gold projects in Newfoundland and an option to acquire the Caledonia Brook gold project in Newfoundland.
