(TheNewswire)
September 20, 2022 – TheNewswire - Rockport,Ontario - New Age Metals Inc. (TSXV:NAM ) ; ( OTC:NMTLF ) ; ( FSE:P7J.F) (“NAM” or “Company”) is pleased toannounce that it has signed a final farm-in/ joint venture agreementwith a wholly owned subsidiary of Australian lithium and iron oreproducer, Mineral Resources Limited (MRL). Under the terms, MRL canearn up to a 75% interest in NAM’s Manitoba lithium division.
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MRL has the right to acquire an initial 51% interest bycompleting C$4,000,000 of exploration and development activities andC$400,000 in cash payments within 42 months from the EffectiveDate
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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
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MRL can earn an additional 10% interest (75%) byfunding the Project to the point of a final construction decision madeby MRL
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NAM shall have the option to complete an initial publicoffering of NAM’s joint venture interest or spinning out NAM’sminority joint venture interest into a public vehicle holding suchminority joint venture interest
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The Manitoba Lithium Division’s budget for 2022 is$1.8 million which will include a minimum of 2 drill programs,satellite data acquisition and analysis on all claim areas,helicopter-borne tri-axial magnetic surveying, and a summer mappingand prospecting program
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$12billion. This agreement replaces thebinding term-sheet that was announced in September 2021 . Ourfinal agreement comes at an opportune time where North Americanlithium demand is high and there is a growing need to introduce localsupply to meet that demand. Lithium is on Canada’s Critical MineralsList and is essential to Canada’s economic security and requiredfor Canada’s transition to a low-carbon economy. Manitoba is an underexplored region inNorth America for lithium and rare elements and is host to the TancoMine, which currently is Canada’s only lithium producer. NAMis the largest land holder in the Winnipeg River Pegmatite field, withmany of the projects strategically located in and around or adjacentto the Tanco Mine. This is astrategic transaction for New Age shareholders as it provides both, anon-dilutive financing for the development of our substantial lithiumdivision through a partnership with one of the worlds largestproducers and the flexibility to finance our share of theprojects through various methods. Theexploration budget for 2022 is $1.8 million.
Agreement Summary
The Farm-in / Joint Venture Agreement provides theframework by which Lithium Mineral Resources Pty Ltd, a wholly ownedsubsidiary of MRL, has the right to acquire up to a 75% beneficialinterest in the Tenements owned by Lithium Canada Development - awholly owned subsidiary of New Age Metals (the Tenements) asfollows:
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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 anunincorporated joint venture in relation to the Project (JV) on theFarm-in Date of the Initial Farm-in Interest. The JV assets will bebeneficially owned by the JV parties in proportion to their JVinterest, see Table 1 below. During the Initial Farm-in Period, NAM will act as manager and shallperform the Initial Farm-in Obligations under the direction of and onbehalf of, MRL, and in return, charge a management fee for conductingits exploration and development activities.
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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 withthe Initial Farm-In Obligation and the FurtherFarm-in Obligation, the Farm-In Obligations ) within seven (7) yearsfrom the Effective Date ( FinalFarm-in Period ).
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.
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if either party exercises their option, MRL will payNAM fair market value for NAM’s JV Interest ( Sale Consideration );
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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 not be restricted fromcompleting an initial public offering of NAM’s JV Interest orspinning out NAM’s minority JV Interest into a public vehicleholding such minority JV Interest as its sole asset and MRL’spre-emptive right shall not apply in either of these instances.
Figure 1 : Southeast Manitobaregional project map, including New Age Metals 11 lithium projectportfolio. Total land position is 21,611 hectares.
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 theworld’s largest owners of hard rock lithium mines.
About NAM
New Age Metals is a junior mineral exploration anddevelopment company focused on the discovery, exploration, anddevelopment of green metal projects in North America. The Company hastwo divisions: a Platinum Group Metals division and a Lithium/RareElement division.
The PGM Division includes the 100% owned,multi-million-ounce, district scale River Valley Project, one of NorthAmerica’s largest undeveloped Platinum Group Metals Projects,situated 100 km by road east of Sudbury, Ontario. The Company completed a positivePreliminary Economic Assessment on the Project in 2019 and, is fullyfinanced to complete a Pre-Feasibility Study on the Project inQ4-2022. In addition to River Valley, theCompany owns 100% of the Genesis PGM-Cu-Ni Project in Alaska and isworking towards securing a option/ joint venture partner to helpdevelop this road accessible drill ready project.
The Lithium Division is one of the largest mineralclaim holders in the Winnipeg River Pegmatite Field, where the Companyis exploring for hard rock lithium and various rare elements such astantalum and rubidium. Further Exploration plansfor 2022 include continued mapping/sampling field program following upon prospective trends outlined in the magnetic data, a maiden drillprogram on the Lithium One Project, and phase two drill program atLithium Two Project. The company has a partnership with MineralResource Limited (MRL, ASX: MIN), one of the top 5 global lithiumproducers to explore and develop the Company’s lithium projectportfolio. The 2022 budget for the Company’s Lithium Division is$1.8 million.
Our philosophy is to be a project generator with theobjective of optioning our projects with major and junior miningcompanies through to production. The Company is actively seeking an option/ joint venture partner forits road-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 Farid Mammadov at faridm@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-lookingstatements to reflect events or circumstances after the date hereof orto reflect the occurrence of unanticipated events. Investors shouldnot place undue reliance on forward-looking statements.
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