DNI Metals Inc. is optioning up to a 51% stake in its vanadium-polymetallic Black Shales project in Alberta to a private company, according to a Dec. 18 release.

Under a letter of intent, the private company can earn the interest by paying C$100,000 initially and another C$150,000 once it completes a reverse takeover transaction or an IPO. It is also required to spend at least C$1 million on exploration and development by March 31, 2021.

DNI would maintain a 49% stake in the project until the private company completes a bankable feasibility study. The parties would then form a joint venture, whereby DNI would be required to contribute its interest to all production and related costs or be diluted to a 2% net smelter royalty.

DNI CEO Dan Weir said the proposed deal will allow it to further develop its vanadium-polymetallic assets without sacrificing its graphite properties, including Vohitsara in Madagascar.

Additionally, the company said a First Nation group intends to buy one claim within its Alberta properties and make the area into a provincial park.