Electric Metals (TSX-V:EML) has announced an option and acquisition agreement that could result in it selling up to 100% of its Nevada silver assets, including the Belmont and Belmont North gold-silver projects, to Altair Resources.
The company said the deal will enable it to focus on developing its high-grade Emily Manganese Project in Minnesota while retaining an economic interest in the Nevada silver assets.
To earn 100% of the assets, Electric Metals (TSX-V:EML) said Altair Resources will ultimately pay it over $1 million in cash and $6.5 million in Altair shares, as well as investing nearly $9 million in project expenditures.
The payments and expenditures are staggered from within 30 days of announcing the option agreement until the end of the fourth anniversary of signing the option agreement. Following the completion of the first-anniversary payments, Altair also has the option to accelerate the acquisition of a 100% option with a one-time payment.
"The sale of our Nevada silver assets comes after much deliberation as we balance the need for focus and continued investment in our high-grade Emily Manganese Project, with the realities of trying to advance and develop two prospective mineral projects,” commented EML Group CEO Gary Lewis.
"But strategy is about making choices, and we feel we have delivered the right balance for EML shareholders by retaining an economic interest in the silver projects, without the need for additional funding or potential dilution.”
EML said Altair will be the operator of the assets under the direction of its technical director and will also manage and execute all exploration programs and spending on the project, adding that a shareholder agreement will govern the respective rights of the parties should Altair not earn a 100% interest in the assets.
“EML will also maintain a degree of oversight over the assets, through our representation on the Altair board and through the ongoing involvement in the Project of our Technical Director, Dr Ian Pringle," Lewis added.
Electric Metals (TSX-V:EML) is a U.S.-based mineral development company with manganese and silver projects geared to supporting the transition to clean energy. The company's principal asset is the Emily manganese project in Minnesota.
Contact the author at stephen.gunnion@proactiveinvestors.com