Essex Minerals Inc (CVE:ESX) (OTCQB:ESXMF) has signed a framework finance agreement with Zola Minerals Inc to boost its streaming or royalty capabilities.
The company announced Wednesday that the agreement provides Essex the option to be Zola's exclusive financing partner for any current or future project in which Zola negotiates a stream or royalty financing agreement.
Under the terms of the deal, Essex will incorporate a special purpose vehicle for the right to earn an 80% economic interest in the stream by arranging 100% of the project financing for those projects in which it chooses to partner.
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Zola, for their part, retains the right to exchange its 20% interest in the stream for shares in the special purpose vehicle.
The final structure of the project financing and the respective interests of Essex and Zola in the special vehicle will be determined project by project based on legal and tax advice for each party, Essex said in a statement, and subject to approval of the TSX Venture Exchange.
"We are excited that we have reached a framework agreement with Zola which provides a clear structure and financing mechanism for Essex to execute a strategy to enter the streaming and royalty business alongside its gold exploration option and joint-venture model,” Essex CEO Paul Loudon said in a statement Wednesday.
"We are currently reviewing a number of potentially long-life metal and renewable energy stream opportunities which Zola has identified and trust that an initial transaction under the framework agreement may be agreed in the near future."
Vancouver-based Essex is focused on mineral exploration and development opportunities where it can adopt an option earn-in and joint venture model without issuing vendor shares.
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