O3 Mining Inc (CVE:OIII) (OTCMKTS:OIIIF) has amended the terms of its option agreement with Gaia Metals Corp (CVE:GMC) on the FCI property in Quebec, according to a joint release on Tuesday.
The amended terms see O3 Mining receiving 500,000 shares of Gaia and the agreement’s second-year anniversary date will be reset to November 3, 2021.
The two companies agreed to amend the terms in light of the COVID-19 pandemic that disrupted exploration and mineral activity in the province, the companies told investors.
READ: O3 Mining upsizes "bought deal" private placement with Sprott Capital Partners and Canaccord Genuity for gross proceeds of around C$30.4M
The FCI claim blocks form a contiguous land package with the Company's wholly owned Corvette claim block and are collectively termed the Corvette-FCI Property, totalling 283 claims and 14,496 hectares within the Guyer Group of the greater La Grande Greenstone Belt.
Under the terms of the amended agreement, originally signed in 2018, the remaining earn-in stipulations require Gaia to incur a total of C$800,000 in work exploration expenditures on or before the second anniversary date, upon which it would vest a 25% interest. Gaia must also incur an additional $1.2 million in work exploration expenditures on or before the third anniversary date, upon which it would vest an additional 25% interest, for a total of 50% undivided interest in the FCI Property.
O3 Mining will act as operator of FCI for the term of the 50% earn-in, with a steering committee of equal representation formed to provide advice and direction to the operator.
Once the 50% earn-in is completed, the two companies will establish a joint venture corporation with Gaia retaining an option to acquire a further 25% interest, for a total of 75% undivided interest, though funding of the next $2 million in exploration expenditures. Gaia may become operator if it notifies O3 Mining that it intends to incur the $2 million in work expenditures for a final undivided interest of 75%.
O3 Mining's remaining 25% interest may be further reduced through dilution if they elect to not fund their portion of subsequent exploration and development. If ownership falls below 10%, O3 Mining will have the right to convert this remaining interest into a 1% Net Smelter Royalty (NSR), of which Gaia retains the right to buy for $5 million in cash or shares for 100% interest.
Contact Angela at angela@proactiveinvestors.com
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