Clean Air Metals Inc (TSX-V:AIR, OTCQB:CLRMF) said it has completed the first tranche for C$10 million of a C$15-million mineral royalty financing agreement with Triple Flag Precious Metals Corp (TSX:TFPM), which features a 2.5% net smelter returns (NSR) mining royalty for all mineral product produced on the Thunder Bay North Critical Minerals project in northern Ontario, temporarily excepting the Escape claims.
The resource project developer said proceeds of the royalty financing will be used to finance the last instalment payment of C$1.5 million cash to Panoramic Resources Inc as the final vesting condition of the option agreement with Benton Resources Inc; to complete the Prefeasibility Study for the project; to advance environmental and regulatory permitting activities; to advance further exploration activities; and for general corporate and working capital purposes.
“The exploration upside at this Mid-Continent Rift-related mineral system being developed at Thunder Bay North is considerable. We look forward to continuing the search for the source of high-value massive sulphide deposits in feeder zone structures, for the benefit of our Indigenous partners and other stakeholders, Clean Air Metals shareholders and our new finance partner Triple Flag Precious Metals Corp," Clean Air Metals CEO Abraham Drost said in a statement.
READ: Clean Air Metals says latest drill results support mine design for flagship Thunder Bay North critical minerals project
Clean Air Metals noted that the second tranche, consisting of C$5 million, will be paid on or before 110 days from the effective date of the royalty agreement, allowing time for due diligence and a decision by Rio Tinto Exploration Canada Inc on whether or not to sell its 1% NSR royalty on the Escape claims to Clean Air Metals for C$2 million, subject to certain conditions.
It said Rio Tinto also has an alternative option to sell its 1% NSR to Clean Air Metals for C$3.5 million at a future date or may elect not to sell its 1% NSR at all.
As well, Clean Air Metals said it has also been granted the right by Triple Flag to buy down up to 40% of the NSR royalty and to reduce the NSR percentage to 1.5% at any time on or before three years following the effective date of the royalty agreement, for C$10.5 million, assuming the closing of both Tranche 1 and Tranche 2 payments.
The company said it has also granted Triple Flag a right of first refusal to match any bona fide written offer that it is willing to accept from any person dealing at arm's length with Clean Air Metals or any of its affiliates to enter into a stream, royalty or similar financing arrangement in or with reference to mineral products extracted from ore which originates within the Thunder Bay North Project and the area of interest.
Clean Air Metals' flagship asset is the 100% owned, high-grade Thunder Bay North project, a platinum, palladium, copper, nickel project located near the City of Thunder Bay, Ontario and the Lac des Iles mine owned by Impala Platinum.
Contact Sean at sean@proactiveinvestors.com