Fabled Copper Corp. (CSE:FABL) said it has signed a letter of intent (LOI) to acquire the TJ property in the Skeena mining division of British Columbia in a cash-and-stock deal from arm's length vendor ARR Mineral Exploration Inc.
According to the LOI, the Vancouver-based junior mining exploration company will have to sign a definitive agreement to exercise the option to acquire the property by paying $20,000 in cash to the vendor, while paying another $50,000 twelve months later. The final payment will include Fabled Copper shares. Fabled Copper will also have to spend not less than $100,000 on exploration and grant the vendor a net smelter return (NSR) royalty.
The TJ Property is on the southern tip of the prolific Golden Triangle region, 95 kilometers (km) northeast of Hazelton in British Columbia. It consists of six contiguous mineral tenures covering an area of 3,176 hectares.
READ: Fabled Copper discovers new veins in 2022 sampling at its Muskwa project in British Columbia
Multiple exploration programs carried out between1984 and 2006 have generated a large multi-element soil geochemical anomaly over an area of 5.4 km by 2.8 km delineating a gold, silver, and base metal target along with numerous bedrock samples ranging from 1.9 grams per ton (g/t) gold (Au), 5 g/t silver (Ag) to 37 g/t Au, 273 g/t Ag over an area 3 km by 4 km in extent.
In 2007, the company said a drilling and trenching program “confirmed the existence of an intrusive.” It is postulated that this is the heat source powering the mineralizing system on the property.
Near the end of the 2008 exploration season, high-grade gold, and silver mineralization with appreciable concentrations of base metals and pathfinder minerals was located in the Discovery Trench area, noted the company.
Terms of the deal
Under the terms of the LOI, Fabled will have the option to acquire the TJ property upon securing financing and regulatory approvals, and on the execution of a definitive agreement. To exercise the option and acquire the TJ Property, Fabled Copper will, following the definitive agreement, pay the vendor the following:
- $20,000 in cash to the vendor on the date of execution of the definitive agreement (the effective date);
- $50,000 in cash to the vendor 12 months after the effective date; and
- A final payment 24 months after the date of execution of the definitive agreement, in common shares of Fabled, having a cash value equal to the value of the property at such date, as determined by a third-party valuator to be chosen by mutual agreement, at a price per share equal to the 20-day Volume Weighted Average Price of the company's shares as traded on the Canadian Securities Exchange or any other stock exchange that the optionee may be listed on.
- In addition, the company must incur not less than $100,000 in exploration expenses on the property prior to 24 months from the effective date and ensure that the property remains in good standing.
- Fabled Copper will also grant the vendor, or their nominee, a 2% NSR royalty over the property that may be purchased by Fabled Copper at any time for an additional $2 million.
Until the above conditions are met there is no assurance that the acquisition will be completed, according to the company.
Proposed share consolidation
In addition, Fabled Copper said that it has mailed meeting materials in connection with a special meeting of shareholders to be held on January 10, 2022, to consider a resolution approving a consolidation of the company's outstanding common shares on the basis of up to one post-consolidation share for every 10 pre-consolidation shares.
According to the company's management, a share consolidation “may increase” its flexibility and offer opportunities with respect to potential business transactions, including equity financings, if determined by the board.
Fabled Copper currently has 173,651,734 common shares issued and outstanding.
Investors can get more details about the potential share consolidation here.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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