AEX Gold Inc (AIM:AEXG, TSX-V:AEX) said it has signed non-binding heads of terms with ACAM LP to establish a special purpose vehicle (SPV) and create a joint venture (JV) to explore and develop its strategic mineral assets for a combined contribution of £36.7 million (circa C$58.0 million).
Subject to the negotiation of the final terms of the JV, ACAM will invest £18.0 million (circa C$28.5 million) in exchange for a 49% share of the SPV, with AEX holding the remaining 51%.
“This JV will enable us to invest the capital required to bring these strategic mineral targets up the value curve towards future production and also enable us to explore the wider area to identify further non-precious strategic mineral assets,” said Eldur Olafsson, CEO of AEX Gold. “The investment AEX has made in its management team, camp, infrastructure, logistics support and local relationships gives us the ability to deliver on this exciting, ambitious and high potential value work programme.”
READ: AEX Gold sets out ambitious exploration programme for 2022 field season in Greenland
AEX is expected to contribute its strategic non-precious mineral (non-gold) licences as well as a contribution valued at £18.7 million (circa C$29.5 million) in the form of site support, logistics and overhead costs associated with utilizing its existing infrastructure in Southern Greenland to support the joint venture’s activities.
An option for further future funding of £10.0 million is to be available when agreed milestones are achieved, the company said.
"Starting with this investment by ACAM of £18 million for a 49% stake in these strategic mineral assets, this deal puts a concrete initial value on the non-precious mineral assets in our portfolio for the first time. To reflect the broader mineral potential in AEX's portfolio, we will be changing the company's name to Amaroq Minerals Limited in the near future," said Olafsson, noting that: "Southern Greenland is one of the few remaining under-explored frontiers for these vital minerals. Our exploration work so far has given us confidence that South Greenland has the potential to host world-class deposits of Strategic Minerals.”
ACAM’s funding to the SPV will help progress the exploration for and identification of strategic minerals (non-precious) across a number of AEX's existing prospective gold targets including Sava and North Sava, Stendalen, Paatusoq, Kobberminebugt. AEX will have managerial and operational control of the JV and all of AEX's gold assets are excluded from the JV.
“The objective of both JV parties is to accelerate the exploration of AEX's existing assets for Strategic Minerals that are in short supply globally, in high demand and vital for the global energy transition,” the company said.
Contact the author at jon.hopkins@proactiveinvestors.com