Stuhini Exploration Ltd (TSX-V:STU) said it has elected to renew its option to acquire the Ruby Creek Property in northwestern British Columbia (BC) under the agreement dated July 29, 2019, as amended, with Global Drilling Solutions Inc.
Under the agreement, Stuhini is entitled to earn a 100% interest in the property by issuing up to 7,300,000 common shares of the company and making cash payments of up to $1,060,000 over a four-year term.
The company said, based on what it considers to be a favourable resource estimate and geological results, as well as current molybdenum futures prices, its board unanimously voted in favour of proceeding with the third-anniversary option commitment. The third option payment consisted of the issuance of 1,750,000 common shares and a $300,000 cash payment to Global Drilling.
In a statement, Dave O'Brien, president and chief executive officer of Stuhini commented: "The notable uptick in the LME Platts Molybdenum futures prices over the past month has enhanced the economic potential of the Ruby Creek Molybdenum deposit."
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"We have now completed 4 of 5 payments associated with the option agreement by issuing the vendor 5.5 million common shares and paying cash consideration of $420,000. With only one payment remaining, we are close to our goal, which is 100% ownership of the Ruby Creek Tenures subject to a 1% NSR," he added.
Following shareholder and TSX Venture Exchange approval of the agreement, the company issued 800,000 common shares to Global Drilling on December 30, 2019, and on unanimous approval of the board of directors of the company, exercised both its first-anniversary option commitment on December 30, 2020, which involved the issuance of 1,250,000 common shares to Global Drilling, and its second-anniversary option commitment on December 29, 2021, which involved the issuance of 1,750,000 common shares to Global Drilling and the issuance of a promissory note to Global Drilling in the amount of $120,000, which note was subsequently fully paid, including interest thereon on September 20, 2022.
The company noted that there are no work commitments required as part of the agreement. The final fourth-anniversary option commitment under the agreement consists of, at the company's election should it wish to exercise the option, the issuance of 1,750,000 common shares and a cash payment of $640,000 on or before December 31, 2023.
Global Drilling is beneficially owned by Barry Hanslit, a co-founder of the company and the vendor of the property. Immediately prior to the third option payment, Hanslit beneficially owned or controlled 5,050,000 common shares representing approximately 14.6 % of the outstanding common shares on an undiluted basis. After the third option payment, Hanslit beneficially owned or controlled 6,800,000 common shares, representing approximately 18.7% of the outstanding common shares on an undiluted basis as at the date of issuance, representing an increase in holdings of approximately 4.1%.
The 28,631-hectare Ruby Creek Project is road accessible and located 14 kilometres (km) east of Atlin, BC. There are 48 different documented mineral occurrences on the property, of which 16 are gold-related, with 7 significant gold placer creeks. The property also hosts the Ruby Creek Molybdenum deposit, which has an intact Mines Act (British Columbia) permit. Stuhini has the option to acquire 100% of the Ruby Creek Project subject to a 1% Net Smelter Royalty (NSR).
Stuhini is a mineral exploration company focused on the exploration and development of precious and base metals properties in western Canada and south-western USA.
The company's portfolio of exploration properties includes: its flagship, the Ruby Creek Property located approximately 14 km east of Atlin, BC; the Que Project located approximately 70 km north of Johnson's Crossing in the Yukon; the South Thompson Project located approximately 35 km northwest of Grand Rapids, Manitoba; the Big Ledge Property located approximately 57 km south of Revelstoke, British Columbia; and its new portfolio of properties in south-east Arizona.
Contact the author at jon.hopkins@proactiveinvestors.com