Great Atlantic Resources Corp. said Feb. 14 that it signed a letter of intent to option a 75% stake in the Kagoot Brook cobalt project in New Brunswick to Explorex Resources Inc.
Explorex will acquire the stake by paying C$25,000 and issuing C$75,000 of shares upon signing a definitive agreement, after which it will issue C$50,000 in shares on the first anniversary of the deal.
Additionally, Explorex will need to spend C$750,000 on the property over four years, including C$100,000 in the first year of the agreement.
Upon Explorex earning 75% of the project, the parties will enter into a joint venture, the terms of which will provide for a pro rata dilution such that should Great Atlantic's interest drop below 5%, it will revert to a 3% net smelter royalty.
Explorex can buy back 2 percentage points of the NSR at C$1 million for each 1%. Should Great Atlantic seek to sell any portion of the remaining NSR, Explorex will have the first right of refusal.
Great Atlantic acquired the property in January and expanded it to 4,232 hectares by staking 3,399 additional claims.
The Kagoot Brook project consists of seven claims and is underlain by Cambro-Ordivician felsic volcanics and sediments.