ACME Lithium Inc revealed that it has struck a term sheet for a funding with Lithium Royalty Corporation (LRC), a leading battery metals royalty and streaming company.
Once the transaction closes, ACME will receive US$650,000 from the grant of project royalties on its Manitoba lithium assets and US$2.35 million through a non-brokered private placement. The total funding for ACME would work out to around US$3 million (C$3,815,400), noted the company.
The closing of the transaction outlined in the term sheet is subject to final due diligence and definitive documentation and is expected to close on or before March 17, 2022.
Lithium Royalty will buy a 2% Gross Overriding Royalty on lithium, or other metals over ACME's Euclid-Cat Lake and Shatford Lake projects in southeast Manitoba, with proceeds to be directed to exploration on those properties.
Lithium Royalty will subscribe for a non-brokered private placement through the issuance of 3.18 million ACME units at C$0.94 per unit. Each unit will consist of one share and one-half of one common share purchase warrant.
Each whole warrant will entitle the holder to buy one additional common share for two years at a price of C$1.22. All securities that are issued following the private placement with be subject to a hold period of four months and one day in line with applicable Canadian securities laws.
ACME said it will channel the gross proceeds of the private placement for exploration at its 100% owned Cat-Euclid and Shatford Lake lithium projects in southeast Manitoba and its Clayton Valley and Fish Lake Valley projects in the mining-friendly US state of Nevada. Some funds will be used as general working capital, added the firm.
ACME holds 27 claims totaling around 11,803 acres strategically situated in the pegmatite fields of the Bird River Greenstone Belt in southeastern Manitoba, in Canada.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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