Metal Energy Corp. (TSX-V:MERG) said it has closed the previously announced exploration option transaction with Mistango River Resources Inc under an agreement dated October 28, 2022, under which Mistango has acquired a 15% interest in the company's Manibridge project.
Under the agreement, Mistango has carried out an aggregate of $ 1.5 million in work obligations to enable the carrying out of exploration work on the Manibridge project. The work obligations were incurred primarily through third-party contractors and for drilling, drill-related work, geophysics, reports and sampling, and all services in support thereof, and also included necessary maintenance and carrying costs including taxes or fees levied by the Province of Manitoba and its agencies and the local municipality (but not sales taxes or taxes on income or profits) relating to the Manibridge project.
Completion of the work obligations on December 21, 2022, has resulted in the granting of the interest to Mistango.
READ: Metal Energy hits 'multiple high-grade nickel-sulphide zones' in drilling at Manibridge project, Manitoba
Mainbridge consists of 19 mineral claims encompassing approximately 4,368 hectares, located in the province of Manitoba, approximately 20 kilometres (km) southwest of Wabowden.
The mining claims are subject to the following net smelter royalties (NSRs): (a) a 2% NSR on the project of which the Metal Energy has the right to buy back half (50% of the aforementioned 2% thereof), at a price of $1 million prior to the expiry of one year after the start of commercial production; and (b) a 1% NSR on claims P1271F and P1262F and a 2% NSR on the other 17 claims of the project.
Under the previously announced call option agreement between Metal Energy and Mistango dated the same date as the option agreement, Metal Energy shall, subject to prior approval of the TSX Venture Exchange, have the right to reacquire the interest from Mistango at any time after February 28, 2023, but before April 30, 2024. The purchase price payable by Metal Energy to Mistango for the interest on the closing date is $2.25 million, which may be paid, at the sole option of Metal Energy, in cash or in common shares of Metal Energy.
The exercise of the call option and the completion of the transfer of interest from Mistango to Metal Energy shall be subject to the prior approval of the exchange. There is no assurance that exchange approval of the call option will be obtained.
No finders' fees were paid in connection with the option agreement.
Metal Energy is a well-financed nickel and battery metal exploration company with two projects, Manibridge and Strange, in the politically stable jurisdictions of Manitoba and Ontario, Canada, respectively. Both projects are subject to earn-in agreements where the company can acquire 100% exploration rights to approximately 16,200 hectares.
Contact the author at jon.hopkins@proactiveinvestors.com