Happy Creek Minerals Ltd. (TSX-V:HPY, OTC:HPYCF) has entered into an asset purchase agreement to sell the Highland Valley copper project in British Columbia to Metal Energy Corp (TSX-V:MERG, OTCQB:MEEEF).
“The sale of the Highland Valley Project to Metal Energy is a significant step in unlocking the value of our project portfolio," Happy Creek CEO Jason Bahnsen said in a statement.
"Happy Creek shareholders will retain a significant exposure to the exploration upside of the Highland Valley project via the equity position that the company will have in Metal Energy plus the NSR royalty over all project claims. This transaction allows Happy Creek to focus on the exploration and development of its Cariboo projects including the high-grade Fox Tungsten Project."
The Highland Valley Project spans 240 square kilometers and is located near Teck Resources’ Highland Valley Copper Mine, Canada’s largest operating copper mine.
The project’s proximity to infrastructure, just 3.5 hours from Vancouver and 30 minutes from Merritt, makes it highly accessible, while its geological similarities to the neighboring Highland Valley Copper Mine enhance its exploration potential.
The project encompasses two priority zones with significant copper mineralization, both offering substantial opportunities for resource expansion.
Zone 1 hosts copper-silver-molybdenum deposits and spans 1,200 meters in length, remaining open to the south and at depth.
Zone 2 features high-grade copper-gold-silver-molybdenum-rhenium mineralization, enriched with gold, distinguishing it from typical deposits in the region.
The property has a rich exploration history, with over 55,000 meters drilled across 402 holes, positioning it as a prime candidate for Metal Energy's future exploration programs.
Metal Energy aims to leverage historical data, updating it into a modern framework to identify new opportunities for drilling and development.
The acquisition terms include a $300,000 cash payment to Happy Creek and the issuance of Metal Energy shares equivalent to 9.9% of its total equity.
Happy Creek will also receive up to $6 million in additional equity over the next four years, as well as a 2.5% net smelter royalty (NSR) on the project, with an option for Metal Energy to repurchase 1.5% of the NSR for $5 million.
As part of the deal, Metal Energy commits to a minimum of $250,000 in exploration expenditures on the property by the end of 2024.
The transaction also grants Happy Creek the right to nominate a director to Metal Energy’s board, ensuring its continued influence on the project’s development.