Lion Copper and Gold Corp (TSX-V:LEO, OTCQB:LCGMF) said it has received TSX Venture Exchange approval for its option to earn-in agreement with Rio Tinto America Inc.
The agreement, struck in March 2022, gives Rio Tinto the option to earn up to a 75% interest in Lion CG’s Mason Valley, Nevada assets, which include the historic Yerington mine and the MacArthur, Wassuk and Bear properties and associated water rights.
Rio Tinto will also evaluate the potential commercial deployment of its Nuton technologies at the site, a copper heap leaching technology developed to deliver greater copper recovery from mined ore and access new sources of copper, such as low-grade sulphide resources and reprocessing of stockpiles and mineralised waste.
READ: Lion Copper and Gold CEO discusses landmark agreement with Rio Tinto at its Nevada copper assets
Upon completion of a feasibility study, Rio Tinto and Lion CG will decide whether to create an investment vehicle into which the assets will be transferred, with Rio Tinto holding not less than a 65% interest in the investment vehicle, according to a release.
If Rio Tinto elects not to create the investment vehicle, then Lion CG will grant to Rio Tinto a 1.5% net smelter return royalty (NSR) on the mining assets. Rio Tinto may also elect to fund up to US$60 million of Lion CG's project financing costs in exchange for a 10% increase in Rio Tinto's ownership percentage.
In addition, if both Rio Tinto and Lion CG agree, Rio Tinto may fund an additional US$40 million of Lion CG's project financing costs in exchange for an additional 5% increase in Rio Tinto's ownership percentage. Rio Tinto may also acquire 1% or a pro rata portion thereof for each US$4.5 million paid for any additional infrastructure that Lion CG and Rio Tinto mutually agree to pursue; and each US$4.5 million which Rio Tinto funds for the feasibility study in excess of the US$50 million.
If Lion CG's ownership percentage in the investment vehicle is diluted to 10% or less, then Lion CG's ownership interest will be converted into a 1% uncapped NSR.
Lion CG is advancing its flagship MacArthur copper project in Mason Valley, Nevada, in addition to advancing its exploration projects including the Chaco Bear and Ashton properties in highly prospective regions in British Columbia, Canada, and the Blue Copper Prospect in Montana.
Contact Angela at angela@proactiveinvestors.com
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