MGX Minerals Inc revealed that it has been inspired by the “significant increase” in the price of nickel to acquire the Letain Nickel project in British Columbia.
Nickel prices have soared to all-time highs in the wake of Russia's invasion of Ukraine. On March 8, 2022, the London Metal Exchange suspended trading in nickel for the first time in its 145-year history after prices doubled in a matter of hours to $100,000 per metric ton. Prices have since eased back to about $80,000 per metric ton.
According to the payment terms, MGX will pay $50,000 within 30 days the closing date, $100,000 within 180 days, $250,000 within 18 months and finally $350,000 within three years for a 90% interest in the promising nickel project.
READ: MGX Minerals intends to complete a non-brokered private placement to raise gross proceeds of $250,000
The Vancouver-based diversified resource company indicated that the vendors would retain a 10% carried interest which may be bought out for $5 million.
According to the terms of the deal, work commitments are outlined as follows:
- The company will invest $30,000 within the first year;
- $100,000 within the second year; and
- $250,000 within the third year.
A 2% net smelter return will remain with the vendors of which half (1%) may be acquired for $1,000,000, said the company.
MGX Minerals said the Letain Nickel property is 50% owned by MGX Minerals CEO Andris Kikauka and it’s a non-arm’s length transaction. The rest of the Letain Nickel project is owned by British Columbia-based businessman John Bakus, according to the company.
According to a report by the previous option holder Margaret Lake Diamonds, samples from the central ridge of the property delineated a 1,100-metre-long discontinuous zone of coarse-grained (>100µm) awaruite. Rock chip samples, 25 in total covered a 1 kilometre (km) x 1.3 km area located in the east-central part of the claims, where First Point Minerals discovered fine and coarse-grained awaruite (native nickel-iron) mineralization in 2010-2011.
MGX Minerals has interests in strategic metals, precious metals, and energy technologies.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive