Search Minerals Inc. (SHCMF)

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CHICO237, douginil; Search Minerals Enters Letter of Intent to Purchase 2.5% NSR on Properties Held in Their Critical Rare Earth District in SE Labrador

https://finance.yahoo.com/news/search-minerals-enters-letter-intent-203000562.html


Search Minerals Inc
Wed, August 11, 2021, 3:30 PM·4 min read
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VANCOUVER, British Columbia, Aug. 11, 2021 (GLOBE NEWSWIRE) -- Search Minerals Inc. (TSXV: SMY | OTCQB: SHCMF) (“Search” or the “Company”) is pleased to announce that it has entered into a non-binding letter of intent (“LOI”) to purchase a 2.5% Net Smelter Royalty (“NSR”) from B&A Minerals Limited (“B&A”) for 15,000,000 common shares in the share capital of the Company. The transaction will also include some property transfers between the interested parties. The 15,000,000 common shares will be restricted and released over 24 months, with 25% being released every 6 months following the signing of the definitive agreement. The parties will now start negotiating a definitive agreement for the proposed transactions which, once signed, will supersede the LOI.

Net Smelter Royalty

B&A current holds a 3% NSR Royalty (“Royalty”) over the licenses contained in a large portion of the Company’s Critical Rare Earth Element District in SE Labrador. Upon closing of the transactions contemplated in the LOI, B&A will retain 0.5% NSR on the remaining consolidated 3 licenses including the Foxtrot project, along with our prospects of Fox Meadow, Silver Fox, Awesome Fox and up to 20 other prospects. The Company had the option to purchase 2% of the Royalty for $2,000,000 as per the 2009 B&A Mining Option Agreement (“Option Agreement”). Pursuant to the terms of the LOI Search will exercise that right along with the purchase of an additional 0.5% of the Royalty.

Also, for greater certainty, the 2009 Mining Option Agreement between B&A and Search will, once the definitive agreement is signed, be fully discharged without any further existing or future contractual obligations.

Property Transfers

As part of the Royalty purchase, B&A and Search have agreed to transfer some licenses between the interested parties. Please see attached map which shows the claims to be transferred to each applicable party.

Search Minerals Inc
Wed, August 11, 2021, 3:30 PM·4 min read
In this article:

View my watchlists

VANCOUVER, British Columbia, Aug. 11, 2021 (GLOBE NEWSWIRE) -- Search Minerals Inc. (TSXV: SMY | OTCQB: SHCMF) (“Search” or the “Company”) is pleased to announce that it has entered into a non-binding letter of intent (“LOI”) to purchase a 2.5% Net Smelter Royalty (“NSR”) from B&A Minerals Limited (“B&A”) for 15,000,000 common shares in the share capital of the Company. The transaction will also include some property transfers between the interested parties. The 15,000,000 common shares will be restricted and released over 24 months, with 25% being released every 6 months following the signing of the definitive agreement. The parties will now start negotiating a definitive agreement for the proposed transactions which, once signed, will supersede the LOI.

Net Smelter Royalty

B&A current holds a 3% NSR Royalty (“Royalty”) over the licenses contained in a large portion of the Company’s Critical Rare Earth Element District in SE Labrador. Upon closing of the transactions contemplated in the LOI, B&A will retain 0.5% NSR on the remaining consolidated 3 licenses including the Foxtrot project, along with our prospects of Fox Meadow, Silver Fox, Awesome Fox and up to 20 other prospects. The Company had the option to purchase 2% of the Royalty for $2,000,000 as per the 2009 B&A Mining Option Agreement (“Option Agreement”). Pursuant to the terms of the LOI Search will exercise that right along with the purchase of an additional 0.5% of the Royalty.

Also, for greater certainty, the 2009 Mining Option Agreement between B&A and Search will, once the definitive agreement is signed, be fully discharged without any further existing or future contractual obligations.

Property Transfers

As part of the Royalty purchase, B&A and Search have agreed to transfer some licenses between the interested parties. Please see attached map which shows the claims to be transferred to each applicable party.

B&A and associates will transfer the following Licenses which are in the proximity of the Company’s Fox Meadow prospect: Fox Meadow area (027318M, 032539M, part of 027599M and part of 027429M) and Deep Fox area (027447M). These licenses will be included in the updated NSR registration and be subject to the existing 0.5% NSR. Search will grant B&A the quarry/gem rights on the above 4 licenses transferred in the Fox Meadow area only after Search has explored/developed those licenses in exchange for a 3% NSR or similar form of royalty.

Search will transfer license 024083M to B&A and receive a 0.5% NSR royalty. This license does not form any part of our Critical Rare Earth Element District.

Greg Andrews, President and CEO states: “We believe the reduction of the Royalty, will provide flexibility with our future discussions regarding offtake agreements and funding for the projects. Our immediate goal remains to advance our Critical Rare Earth Element District to production. This will require (a) advancing our DEEP FOX project to a measured and indicated resource, (b) provide engineering and economic studies such as Preliminary Economic Assessments (“PEA”) and Feasibility Studies and (c) develop and submit an Environmental Assessment report to initiate the environmental and permitting process for DEEP FOX and FOXTROT. The reduction of the NSR will be included in the upcoming PEA.”

Corporate Developments:

On April 12, 2021, the Company put into effect a blackout on trading of the Company’s shares for the management and board of directors of the Company and InCoR Holdings (the Company’s controlling shareholder). This blackout is now lifted.

About Search Minerals Inc.

Led by a proven management team and board of directors, Search is focused on finding and developing Critical Rare Earths Elements (CREE), Zirconium (Zr) and Hafnium (Hf) resources within the emerging Port Hope Simpson – St. Lewis CREE District of South East Labrador. The Company controls a belt 63 km long and 2 km wide and is road accessible, on tidewater, and located within 3 local communities. Search has completed a preliminary economic assessment report for FOXTROT, and a resource estimate for DEEP FOX. Search is also working on three exploration prospects along the belt which include: FOX MEADOW, SILVER FOX and AWESOME FOX.

Search has continued to optimize our patented Direct Extraction Process technology with the generous support from the Department of Tourism, Culture, Industry and Innovation, Government of Newfoundland and Labrador, and from the Atlantic Canada Opportunity Agency. We have completed two pilot plant operations and produced highly purified mixed rare earth carbonate concentrate and mixed REO concentrate for separation and refining.