(TheNewswire)
September 28, 2021 – TheNewswire - Rockport,Ontario - New Age Metals Inc. (TSXV:NAM ) ; ( OTC:NMTLF ) ; ( FSE:P7J.F) (“NAM” or “Company”) is pleased toannounce that it has entered into a binding term sheet with a whollyowned subsidiary of Australian lithium and iron ore producer, MineralResources Limited (MRL). Under the terms, MRL can earn up to a 75%interest in NAM’s Manitoba lithium division.
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- NAM enters into a legally binding term sheet with MRLwith respect to NAM’s Manitoba lithium projects
- MRL has the right to acquire an initial 51% interestby completing C$4,000,000 of exploration and development activitiesand C$400,000 in cash payments within 42 months from the EffectiveDate
- MRL can earn an additional 14% interest (65%) bycompleting a NI 43-101 compliant mineral resource estimate andPre-Feasibility Study on developing a spodumene concentrate operationat one or more of NAM’s Projects
- MRL can earn an additional 10% interest (75%) byfunding the Project to the point of a final construction decision madeby MRL
- NAM shall have the option to complete an initialpublic offering of NAM’s joint venture interest or spinning outNAM’s minority joint venture interest into a public vehicle holdingsuch minority joint venture interest
- NAM intends to complete a maiden drill program on itsLithium Two Project in October 2021. Lithium Two hosts a historicnon-NI 43-101 compliant mineral resource of 544,000 tonnes at 1.4%Li2O
Harry Barr, Chairman & CEO commented: “The stated mandate forour lithium division since acquisition of our projects was to secure astrategic partner with exploration, development, and productionexpertise, and this agreement with Mineral Resources Ltd fulfills ourobjective. Mineral Resources is one of the worlds largest lithiumproducers with a current market capitalization of approximately A$9billion. This agreement comes at an opportune time in the market whereNorth American lithium demand is high and there is a growing need tointroduce local supply to meet that demand. Manitoba is anunderexplored region in North America for lithium and rare elements.This is a strategic transaction for New Age shareholders as itprovides both, a non-dilutive financing for the development of oursubstantial lithium division through a partnership with one of theworlds largest producers and the flexibility to finance our share ofthe projects through various methods. Our phase one exploration planis to complete a maiden drill program at our Lithium Two Project andground proof geophysical targets that were identified earlier thisyear.
Term Sheet Summary
The binding term sheet provides the framework by whichLithium Mineral Resources Pty Ltd, a wholly owned subsidiary of MRL,has the right to acquire up to a 75% beneficial interest in theTenements owned by Lithium Canada Development - a wholly ownedsubsidiary of New Age Metals (the Tenements) as follows:
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(a) an initial 51% interest( Initial Farm-inInterest ) by completing C$4,000,000 ofexploration and development activities on the Tenements ( Initial Farm-in Obligation ) within 42 months from the Effective Date ( Initial Farm-in Period ) with a minimummandatory expenditure of C$1,000,000 of exploration and developmentactivities within 18 months . In the event MRLearns the Initial Farm-in Interest, the parties agree to establish an unincorporated joint venture in relation to theProject (JV) on the Farm-in Date of the Initial Farm-in Interest. TheJV assets will be beneficially owned by the JV parties in proportionto their JV interest, see Table 1 below. During the Initial Farm-in Period, NAM willact as manager and shall perform the Initial Farm-in Obligations underthe direction of and on behalf of, MRL, and in return, charge amanagement fee for conducting its exploration and developmentactivities.
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(b) a further 14% interest( Further Farm-inInterest ) by completing a NI 43-101 compliantPre-Feasibility study on developing a spodumene concentrate operationat one or more of the Projects, including the completion of acompliant resource statement ( Further Farm-in Obligation ) within five (5)years from the Effective Date ( Further Farm-in Period ); and
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(c) a final 10% interest( Final Farm-inInterest ) by funding the Project to the point ofa final construction/investment decision ( FID ) made by MRL( Final Farm-inObligation , and collectively with the Initial Farm-In Obligation and the Further Farm-inObligation, the Farm-InObligations ) within seven (7) years from theEffective Date ( Final Farm-inPeriod ).
Table 1 : JV interests of the JVparties at each Farm-in Date
Farm-in Date | JV Interests |
Initial Farm-in Interest | 51% MRL: 49% NAM |
Further Farm-in Interest | 65% MRL: 35% NAM |
Final Farm-in Interest | 75% MRL: 25% NAM |
In consideration of NAM entering this term sheet, MRLwill pay to NAM a sum of C$400,000 according to the followingschedule: C$100,000 on the Effective Date and on each of the first three (3)anniversaries of the Effective Date.
At FID, NAM may elect to sell ( Put Option ) and MRLmay elect to buy ( CallOption ), NAM’s JV Interest on the followingterms:
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- NAM or MRL may provide notice to exercise the PutOption (or royalty conversion option in the case of NAM – see below)or Call Option (as applicable) within 30 days of FID.
- if either party exercises their option, MRL will payNAM fair market value for NAM’s JV Interest ( Sale Consideration );
- at MRL’s election, up to 50% of the SaleConsideration can be settled with an equivalent value in ordinaryshares in MRL.
Fair market value will be determined by an independentmining valuation expert appointed by the parties.
All funding post-FID will be by the JV parties inaccordance with their JV Interests.
At FID, MRL will provide NAM with a loan to fund itsproportion of the development costs of the Project. The parties mustenter into a loan agreement to record the terms of the loan, whichmust include:
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(i) interest being payable at arate that is equal to MRL’s weighted cost of capital atFID;
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(ii) the loan being repaid inpriority to all other payments from net revenue received by NAM fromthe sale of its share of product from the Project.
At FID, NAM may withdraw from the JV by electing toeither: convert its JV Interest to a 2.5% Net Smelter Returns (NSR)royalty on all lithium and other minerals that are extracted from theProject and sold at the mine gate and the JV will terminate; orexercise the Put Option.
Each JV party will own and be entitled to take thatproportion of product produced from the Project equivalent to its JVInterest in kind.
Each party has a pre-emptive right to acquire the otherparty’s JV Interest if that other party proposes to sell, transferor otherwise dispose of its JV Interest (including any sale, transferor disposal that occurs by reason of a change of control of that otherparty). For greater certainty, NAM shall notbe restricted from completing an initial public offering of NAM’s JVInterest or spinning out NAM’s minority JV Interest into a publicvehicle holding such minority JV Interest as its sole asset andMRL’s pre-emptive right shall not apply in either of theseinstances.
Figure 1 : Southeast Manitobaregional project map, including New Age Metals lithium projectportfolio
About Mineral ResourcesLimited
Mineral Resources Limited is an innovative and leading mining servicescompany, with a growing world-class portfolio of mining operationsacross multiple commodities, including iron ore and lithium. MRL hasa diversified commodities portfolio located in the Pilbara and Yilgarnregions in Western Australia. The Company has developed two hard rocklithium operations in Western Australia making them one of the worldslargest owners of hard rock lithium mines.
About NAM
New Age Metals is a junior mineral exploration and development companyfocused on the discovery, exploration and development of green metalprojects in North America. The Company has two divisions; a PlatinumGroup Metals (PGM) division and a Lithium/Rare Element division.
The PGM Division includes the 100% owned, multi-million-ounce,district scale River Valley Project, one of North America’s largestundeveloped Platinum Group Metals projects, situated 100 km northeastfrom Sudbury, Ontario. The Companycompleted a positive Preliminary Economic Assessment on the Project in2019, and is fully financed to complete a Pre-Feasibility Study on theProject. A technical report is slated to be published by the end ofthe first half of 2022. In addition to River Valley, theCompany is the 100% owner of the Genesis PGM-Cu-Ni Project.
The Lithium Division is one of the largest mineral claim holders inthe Winnipeg River Pegmatite Field, where the Company is exploring forhard-rock lithium and various rare elements, such as tantalum andrubidium. 2021 plans includedrone-supported geophysics on at least five of the Company’s sevenprojects, and a maiden diamond drill program on the Company’sLithium Two Project.
Our philosophy is to be a project generator with the objective ofoptioning our projects to major and junior mining companies topotentially develop them through to production. The Company isactively seeking an option/ joint venture partner for itsroad-accessible Genesis PGM-Cu-Ni Project in Alaska.
Investors are invited to visit theNew Age Metals website at www.newagemetals.com where they can reviewthe company and its corporate activities. Any questions or commentscan be directed to info@newagemetals.com or Harry Barr at Hbarr@newagemetals.com or Cody Hunt at Codyh@newagemetals.com or call 613 659 2773.
If you have not done so already, we encourage you tosign up on our website ( www.newagemetals.com ) to receive our updated news.
On behalf of the Board of Directors
“ Harry Barr”
Harry G. Barr
Chairman and CEO
Neither the TSX Venture Exchange nor its RegulationServices Provider (as that term is defined in the policies of the TSXVenture Exchange) accepts responsibility for the adequacy or accuracyof this release. Cautionary Note Regarding Forward Looking Statements:This release contains forward-looking statements that involve risksand uncertainties. These statements may differ materially fromactual future events or results and are based on current expectationsor beliefs. For this purpose, statements of historical fact may bedeemed to be forward-looking statements. In addition,forward-looking statements include statements in which the Companyuses words such as “continue”, “efforts”, “expect”,“believe”, “anticipate”, “confident”, “intend”,“strategy”, “plan”, “will”, “estimate”, “project”,“goal”, “target”, “prospects”, “optimistic” or similarexpressions. These statements by their nature involve risks anduncertainties, and actual results may differ materially depending on avariety of important factors, including, among others, the Company’sability and continuation of efforts to timely and completely makeavailable adequate current public information, additional or differentregulatory and legal requirements and restrictions that may beimposed, and other factors as may be discussed in the documents filedby the Company on SEDAR (www.sedar.com), including the most recentreports that identify important risk factors that could cause actualresults to differ from those contained in the forward-lookingstatements. The Company does not undertake any obligation to reviewor confirm analysts’ expectations or estimates or to releasepublicly any revisions to any forward-looking statements to reflectevents or circumstances after the date hereof or to reflect theoccurrence of unanticipated events. Investors should not place unduereliance on forward-looking statements.
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