European Lithium (ASX:EUR) has received the second cash instalment of $20,000 as part of the sale of its 100% owned Paynes Find Gold Project to Cervantes Corporation (ASX:CVS).
In accordance with the terms of the transaction, the cash payment represents completion of the due diligence process.
The balance of funds will be received upon receipt of all necessary shareholders, regulatory and third party approvals and upon entering into a formal agreement.
Consideration for the transaction consists of cash and share capital in CVS as follows:
- $500,000 to be satisfied through the issue of 25 million shares in CVS, at a deemed issue price of $0.02 on completion of the transaction; and
- $500,000 in cash paid in instalments.
$25,000 of the cash instalments are now paid, with the remaining payments being:
- $25,000 on signing of a formal agreement;
- $100,000 on completion of the transaction
- $150,000 on the later of CVS completing a $1 million capital raising, or completion of the transaction; and
- $200,000 on the later of 60 days following the purchaser completing the $1 million capital raising, or completion of the transaction.
European Lithium continues to focus on its Wolfsberg Lithium Project in Austria, where recent test work showed a spodumene flotation concentrate exceeding 6% lithium can be readily achieved.
The company is working on recovery of marketable by-products, which would further enhance economics at Wolfsberg.
This is scheduled for completion by the end of April 2017.