Trek Metals has confirmed it has executed a share sale Agreement to acquire 100% of the Kroussou project from the company's JV partner, Battery Minerals with completion anticipated in early April.
Trek Metals has been progressing its exploration at the Kroussou project over the past 12 months and is ready to commence its maiden exploration drilling programme during Q2 2018.
“We are very excited to take control of this highly prospective project," comments Trek Metals MD, Bradley Drabsch.
"Owning 100% provides flexibility in undertaking exploration activities as well as longer term strategic flexibility when considering options for maximising the project’s value," he adds.
"Kroussou presents us a unique opportunity in a forgotten part of the world that has received precious little attention for its base metals potential in the past.
"We remain committed to the discovery of a genuine World Class mineralised system at Kroussou and so far, we have all the ingredients present to do exactly that," he continues.
Key Terms of the Agreement
The Agreement formalises a previous term sheet and replaces the farm in arrangements with Battery Minerals (BAT). A summary of the key terms of the agreement is as follows:
- Trek Metals will acquire 100% of the issued capital of BAT's Mauritian subsidiary, Select Exploration which holds a 100% interest in the Kroussou project
- The initial consideration for the acquisition of the Kroussou project is:
- a cash payment of US$200 000 to BAT and
- the issue of $200 000 of Trek Metals' shares based on a 5‐day VWAP prior to the date of issue and subject to a minimum floor price of $0.025 and one free attaching option for every two consideration shares issued
- The consideration shares will be subject to a 12‐month voluntary escrow period
- Upon Trek Metals defining a JORC‐compliant Indicated mineral resource estimate of more than 250 000 tonnes of combined Zn/Pb metal in relation to the Kroussou project and subject to shareholder approval, the company will issue BAT $2 500 000 of Trek Metals shares based on a 5‐day VWAP prior to the date of issue and one free attaching option for every two deferred consideration shares issued
- Trek will grant BAT a 2.5% net smelter return royalty on gross sales revenue (NSR Royalty) with Trek having an option to buy back 1% of the NSR Royalty for $1 500 000
- An existing 0.75% net smelter return royalty payable in relation to the Kroussou project to a third party which can be bought back for $250 000, will be notated from BAT to Trek Metals as part of the acquisition
- The Agreement also contains conditions precedent, indemnities, representations and warranties from the parties that are considered standard for this type of transaction
The Kroussou project:
- Strongly zinc and lead mineralised rocks at surface along tens of kilometres of strike
- Large zinc and lead soil anomalies
- Geophysical imagery suggests large, strong conductors potentially associated with known mineralisation and extensions to it along with new targets
- Drill targeting being finalised with drilling set to commence at the onset of the upcoming dry season