Meryllion Resources Corporation (CSE:MYR, OTC:MYRLF) told investors it plans to exercise its previously announced option for rare earth exploration leases held by Tasmania Strategic Green Metals (TSGM) and Westbury Resources in Tasmania, Australia.
The company noted that the option agreement originally required an initial cash payment of A$125,000 (C$112,500) to the two companies. Under an amendment to the agreement, it will now pay A$200,000 through the issuance of 4,186,046 common shares at a deemed price of $0.043 per share.
"The election by our partners to take their option consideration in the form of shares, rather than cash, shows their belief in the Project and the highly undervalued nature of Meryllion's shares,” Meryllion CEO Richard Revelins commented in a statement.
Once the initial shares have been allotted, Meryllion said it will have the right, but not the obligation, to earn a 50% interest in the project by spending a minimum of A$300,000 on an agreed initial exploration program within 180 days of the date on which it exercises the option; committing to spending an additional A$200,000 on the project within the subsequent 90 days; paying TSGM A$100,000 to be refunded by TSGM to certain of its seed investors; and subject to usual regulatory approvals, allotting A$100,000 worth of its common shares to these seed investors.
Once it has earned its 50% interest in the project, Meryllion said it will have the right, but not the obligation, to acquire additional interests in the project, by way of 10% increments over time up to a maximum of 80% through the funding of additional project expenditures totaling A$600,000 and aggregate payments to TSGM and Westbury of A$200,000 in cash and A$160,000 in shares of Meryllion. It will have 30 months from the earn-in date to earn up to its maximum interest.
“We are working closely with Ian Neilson and his exploration team to get into the field as soon as possible and start to generate some exploration success,” Revelins added.
“We have also been working closely with our independent experts to complete an N1 43-101 report in relation to the project and anticipate that the report will be available for release within the next two weeks.”