Mineral and Financial Investments Limited (LON:MAFL) said it has agreed on a resolution to the earn-in option agreement at Lagoa Salgada with Ascendant Resources.
M&FI, through a Swiss subsidiary, currently owns 75% of Redcorp Empreedimentos Mineiros, whose main asset is the 23Mt Lagoa Salgada polymetallic project in Portugal.
The option currently is that Ascendant must fulfil its work obligations, totalling US$9.0mln, and pay M&FI US$2.5mln over the next 2 years to reach 50% ownership.
To reach 80% ownership of Redcorp, Ascendant must complete a feasibility study and pay M&FI an additional US$2.5mln.
Reflecting the problems caused by the coronavirus pandemic, M&FI said the option agreement has been amended so that Ascendant’s next payment of US$500,000 will be satisfied by six monthly payments of US$100,000 (a total of US$600,000), and an additional security pledge.
The final payments due to MAFL under the Option Agreement at intervals of 36 months and 48 months after completion remain unchanged. In the event of a default, the option would lapse and ownership would be frozen at the then level of ownership,
In the event of a financing or change of control, the amount owed will be paid on closing, the group said in a statement.
Ascendant acquired an initial effective 25% interest for an upfront payment of US$2.45 million in August 2018.
"This an example as to how M&FI can work constructively with its investee companies while securing improved returns for MAFL shareholders," the company said.
