DEEP:CC - DeepRock Minerals Enters Agreement to Acquire a Net Profit Stream from Allied Critical Metals to Advance a Tungsten Pilot Plant & Quarry Operation in Portugal
(TheNewswire)
Vancouver, BC – TheNewswire - March 20th, 2024 – DeepRock MineralsInc. (CSE:DEEP) ("DeepRock" or "theCompany") , is pleased to announce a letteragreement signed with Allied Critical Metals Corp. (“Allied” or"ACM") to acquire (the “Acquisition”) a net profitsstream for the Vila Verde Tungsten-Tin Project Test Plant (the“Project”) to process stockpiled tungsten mineralized material atthe quarry. This stream delivers near-term financing to accelerateACM’s plans for its tungsten processing operations in Portugal.
Under the terms of the agreement, signed March19 th , 2024, DeepRock will acquire a 10% net profits stream fromthe operation of a pilot plant processing tungsten mineralizedmaterial. The net profits stream in respect of the pilot plant, is setto process up to 150,000 tonnes per year of tungsten mineralizedmaterial sourced from the Vila Verde tungsten property and the nearbyBorralha tungsten property in Portugal. ACM holds exclusivecontractual rights to acquire, develop, and exploit these properties,collectively known as the Tungsten Properties. DeepRock's 10% netprofits interest will entitle DeepRock to receive the greater of 10%of the net profits from the sale of tungsten concentrate produced bythe pilot plant or C$500,000 per year for a term of 10 years once thepilot plant is operating at an optimal level.
Net Profit payments will be made quarterly followingthe commencement of commercial production from the pilot plant. Toearn the 10% interest, DeepRock must pay ACM a total of C$1,000,000 incash by April 30, 2024, with an initial deposit of C$200,000(“Deposit”) due by March 31, 2024 and C$800,000 by April 30, 2024.Failure to complete the payment by the specified dates will result inthe conversion of the Deposit (C$200,000) into common shares of ACM ata price of $0.10 per share for a total of 2,000,000 ACM shares. Thenet profits agreement is subject to a definitive agreement, which willoutline the detailed terms and conditions of the net profits streamingarrangement and these details will be disclosed in a future newsrelease. The agreement is subject to applicable securities laws andthe policies of the Canadian Securities Exchange and the Company beingable to raise the funds necessary to finance and close thetransaction. No finder’s fee was paid related to the proposedacquisition.
Andrew Lee, CEO of DeepRock Minerals, stated:"This agreement underscores our commitment to sustainableresource development and marks a significant milestone in ourstrategic cashflow and growth initiatives. We are thrilled to beworking with Allied on a near-term cash flow stream that involvestungsten—one of the most critical raw materials for the EU."
The Acquisition is a "related partytransaction" pursuant to Multilateral Instrument61-101—Protection of Minority Security Holders in SpecialTransactions ("MI 61-101") as Andrew Lee is a director andofficer of DeepRock and ACM. However, the Company is exempt from therequirements to obtain formal valuation and minority shareholderapproval in connection with the Acquisition in reliance, respectively,on Section 5.5(b) of MI 61-101 as the Company is not listed on a"specified market" and on Section 5.7(1)(c) pursuant toSection 5.5(e) of MI 61-101 as a transaction supported by an arm’slength control person, Thomas Christoff who is a director and largestshareholder of the Company holding voting rights for 19,275,000 commonshares of the Company representing 21.57% of the issued andoutstanding common shares of the Company, comprised of 6,360,000common shares (7.11%) owned by Mr. Christoff and 12,915,000 commonshares (14.45%) of which he has discretionary voting control.
Private Placement
The Company also announces it intends to complete anon-brokered private placement financing of up to 25,000,000 units ofthe Company (the “Units”) at a price of $0.02 per Unit foraggregate gross proceeds of up to $500,000 (the “Offering”).
Each Unit will consist of one (1) common share of theCompany and one-half of one (1/2) non-transferable common sharepurchase warrant (each whole warrant a “Warrant”). Each Warrantwill be exercisable by the warrant holder to acquire one (1)additional common share at a price of CAD$0.06 for a period oftwenty-four (24) months from the closing of the Private Placement (the“Closing Date”). The proceeds from the Offering will be used bythe Company towards the purchase of the net profit interest inPortugal, property payments, marketing, general working capital andaccounts payable. The Offering is expected to close on or about earlyApril 2024.
In consideration of the introduction to the Company ofinvestors in the Offering, a finder's fee may be paid in cash or insecurities of the Company in accordance with applicable securitieslaws and Canadian Securities Exchange (“CSE”) policies. Thecompletion of the Offering will be subject to receipt of and allnecessary regulatory approvals, including, approval by the CanadianSecurities Exchange. The securities issued in connection with theOffering will be subject to a four-month hold period under applicableCanadian securities laws commencing on the Closing Date of the Offering. It is anticipated that insidersof the Company will participate in the Offering. Participation ofinsiders of the Company in the Offering will constitute a relatedparty transaction as defined under Multilateral Instrument 61-101 -Protection of Minority Security Holders in Special Transactions (“MI61-101”). The Company intends to rely on the exemption from theformal valuation requirements of Section 5.4 of MI 61-101 pursuant toSubsection 5.5(a) of MI 61-101 and the exemption from the minorityapproval requirements of Section 5.6 of MI 61-101 pursuant toSubsection 5.7(1)(a) of MI 61-101.
The Company also announces today, the resignation ofRichard Shatto from its Board of Directors.
About Allied Critical Metals
Allied Critical Metals is a mining exploration anddevelopment company focused on the exploration and development of thenear-term production brownfield wolframite tungsten projects innorthern Portugal – the Borhalla Tungsten Project and the VillaVerde Tungsten Project. For more information, see https://alliedcritical.com .
About DeepRock Minerals
DeepRock Minerals is a Canadian mineral explorationcompany headquartered in Vancouver, British Columbia engaged in theacquisition, exploration, and development of mineral resourceproperties.
On Behalf of the Board of Directors
Andrew Lee
President/CEO/Director
604-720-2703 / ys.andrew.lee@gmail.com
Cautionary Note RegardingForward-Looking Statements
Neither the Canadian Securities Exchange nor itsRegulation Services Provider accepts responsibility for the adequacyor accuracy of this release. This news release contains"forward-looking information" including statements withrespect to the future exploration performance of the Company. Thisforward-looking information involves known and unknown risks,uncertainties and other factors which may cause the actual results,performance or achievements of the Company to be materially differentfrom any future results, performance or achievements of the Company,expressed or implied by such forward-looking statements. These risks,as well as others, are disclosed within the Company's filing on SEDAR,which investors are encouraged to review prior to any transactioninvolving the securities of the Company. The forward-lookinginformation contained herein is provided as of the date of this newsrelease and the Company disclaims any obligation, other than asrequired by law, to update any forward-looking information for anyreason. There can be no assurance that forward-looking informationwill prove to be accurate and the reader is cautioned not to placeundue reliance on such forward-looking information.
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