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Re: antman post# 243

Wednesday, 12/06/2023 8:45:20 AM

Wednesday, December 06, 2023 8:45:20 AM

Post# of 255
Appia Rare to issue 500,000 shares under PCH option

2023-12-04 11:14 ET - News Release


Mr. Tom Drivas reports

APPIA ANNOUNCES CLOSING OF PCH PROJECT ACQUISITION

Appia Rare Earths & Uranium Corp., further to the press release issued on June 9, 2023, will be issuing the first tranche of 500,000 shares pursuant to the definitive agreement with 3S Ltda., Beko Invest Ltd., Antonio Vitor Jr. and AZ125 Mineracao Ltda., now known as Appia Brasil Rare Earths Mineracao Ltda., to acquire up to a 70-per-cent interest in the PCH project located in the Tocantins structural province of the Brasilia fold belt, Goias state, Brazil.

Pursuant to the terms of the definitive agreement, the property is now registered in the name of the company, and Appia currently holds a 70-per-cent interest in the company (350,000 quotas) and Mr. Vitor holds a 30-per-cent interest in the company (150,000 quotas). The first tranche of 500,000 shares will be issued to Beko on Dec. 11, 2023.

Upon the issuance of the 500,000 shares, the continuing exploration and development of the property will be governed by the terms of a quota holders agreement among Appia, Beko, Mr. Vitor and the company dated July 20, 2023. Appia can maintain its 70-per-cent interest in the company by issuing an aggregate of a further two million common shares of Appia to Beko and spending $10-million (U.S.) on the property over a period of five years (the option period), after which Appia will have earned a 60-per-cent interest in the company. If Appia earns its 60-per-cent interest, it will then be obligated, within 90 days of earning its 60-per-cent interest, to issue a further $1.25-million (U.S.) of common shares of Appia to Beko to earn a further 10-per-cent interest in the company. The number of shares to be issued to earn the further 10 per cent shall be that number of common shares of Appia equal to the number arrived at by dividing $1.25-million (U.S.) by the greater of: the average closing price of the common shares as quoted on the Canadian Securities Exchange (CSE) for the 30 trading days immediately preceding the announcement by Appia of its intention to earn the additional 10-per-cent interest; and the discounted market price of the common shares of Appia based on the last closing price immediately preceding the announcement.

Appia will acquire incremental vested interests in the company upon completion of specific expenditure requirements, pursuant to the terms of the definitive agreement. Once Appia issues at least a further 500,000 common shares to Beko and spends at least $1-million (U.S.) on the property (at which time it will have earned a 10-per-cent interest in the company) (the initial obligation), Beko will be granted a 1-per-cnet net smelter return (NSR) royalty in the property. Appia will have a right of first refusal to acquire the 1-per-cent NSR.

Once Appia has earned its 70-per-cent interest in the company, Appia and Mr. Vitor will enter into a joint venture with respect to the further exploration and development of the property, with Appia holding a 70-per-cent interest and Mr. Vitor holding a 30-per-cent interest in the company. The quota holders agreement will act as a unanimous shareholders agreement and a joint venture agreement with respect to the further exploration and development of the property. Upon the formation of the joint venture, Mr. Vitor will have 90 days within which to elect to either: (a) participate in the joint venture and contribute his pro rata share of expenditures, or be diluted; (b) sell all of his 30-per-cent interest in the company, subject to a right of first refusal in favour of Appia; or (c) elect to have Appia finance its pro rata share of expenditures pursuant to the joint venture, subject to the right of Appia to be reimbursed for 150 per cent of the expenditures made by Appia on behalf of Mr. Vitor before any proceeds are paid to Mr. Vitor.

If a party is required to make a contribution pursuant to the joint venture and that party does not make its pro rata contribution to development expenditures, that party's interest in the company will be diluted pro rata, based upon that party's deemed and actual contributions to the joint venture relative to the total deemed and actual contributions to the joint venture by both parties. A party whose interest is diluted to 10 per cent or less shall immediately be converted to a 1-per-cent net smelter return royalty, with the remaining party's interest converted to a 100-per-cent interest in the company subject to payment of the 1-per-cent dilution NSR. The remaining party will have a right of first refusal to purchase the 1-per-cent dilution NSR.

Should Appia fail to make some or all of the expenditures required in any year, Beko will notify Appia in writing of such failure, after which Appia will have 30 days to make the required expenditure. Failure to make the expenditure within the 30 days will result in Appia's earned interest being reduced pro rata in proportion to the amount of money actually expended by Appia in such year. Appia shall have the right to make additional expenditures in a subsequent year to earn the balance of the interest it would have earned had it made the entire expenditure in the previous year. If Appia fails to expend an aggregate of $10-million (U.S.) and issue an aggregate of two million common shares of Appia to Beko within the option period, Appia may, at any time during the option period after completing the initial obligation, notify Beko that it does not intend to provide any further financing for the property (the cease financing notice). Upon delivery of the cease financing notice to Beko, Appia shall have earned the applicable interest in the company and shall transfer to Mr. Vitor that number of quotas of the company equal to 70 per cent minus the earned interest. Thereafter, Appia shall hold the earned interest in the company and Mr. Vitor shall hold 100 per cent minus the earned interest in the company. Upon delivery of the cease financing notice, and the adjustment in the interests of Appia and Mr. Vitor in the company, the parties shall use their commercially reasonable efforts to determine how to proceed with their respective interests in the company.

Background on the PCH project

The PCH project is located within the Tocantins structural province in the Brasilia fold belt, more specifically, the Arenopolis magmatic arc. The PCH project is 17,551.07 hectares in size and located within the Goias state of Brazil. It is classified as an alkaline intrusive rock occurrence with highly anomalous REE (rare earth element) and niobium mineralization. This mineralization is related to alkaline lithologies of the Fazenda Buriti plutonic complex, and the hydrothermal and surface alteration products of this complex by supergene enrichment in a tropical climate. The positive results of the geochemical exploration work carried out to date indicates the potential for high-grade REEs and niobium mineral resources within the lateritic ionic adsorption clays.

About Appia Rare Earths & Uranium Corp.

Appia is a publicly traded Canadian company in the rare earth element and uranium sectors. The company is currently focusing on delineating high-grade critical rare earth elements and gallium on the Alces Lake property, as well as exploring for high-grade uranium in the prolific Athabasca basin on its Otherside, Loranger, North Wollaston and Eastside properties. The company holds the surface rights to exploration for 113,837.15 hectares (281,297.72 acres) in Saskatchewan. The company also has a 100-per-cent interest in 12,545 hectares (31,000 acres), with rare earth element and uranium deposits over five mineralized zones in the Elliot Lake camp, Ontario. Lastly, the company holds the right to acquire up to a 70-per-cent interest in the PCH project which is 17,551.07 ha in size and located within the Goias state of Brazil (see June 9, 2023, press release).

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