Kuya can acquire a 100% interest in Electra’s remaining assets in the Canadian Cobalt Camp by paying a total of $1m, while Electra is eligible to receive a two per cent royalty on net smelter returns from production at the remaining assets
Electra, Kuya Silver amend option agreement. (Credit: Dominik Vanyi on Unsplash)
Electra Battery Materials has agreed to amend its 2021 share purchase and option agreement with Kuya Silver for silver and cobalt assets in the Canadian Cobalt Camp.
Under the terms of the amended agreement, Kuya gets the right to acquire a 100% interest in Electra’s remaining assets in the Canadian Cobalt Camp.
The company can exercise the right by paying a total of $1m in cash or issuing shares worth the equivalent value, before 31 January 2023.
The company has also signed a royalty agreement with Electra, where Electra is eligible to receive a two per cent royalty on net smelter returns from production at the remaining assets.
Electra retains a right of the first offer to refine any base metal concentrates produced from the assets, at its refinery in Ontario, Canada.
Electra CEO Trent Mell said: “Our initial agreement with Kuya was designed to allow us to maximize shareholder value for our exploration assets in Ontario, given our primary focus on re-commissioning North America’s first cobalt sulphate refinery.
“Accelerating the terms of the initial agreement with Kuya allows us to focus on advancing our strategy of developing an integrated battery materials complex that combines the production of cobalt, nickel, and manganese sulphates with the recycling of battery black mass.”
The two companies initially signed a share purchase and option agreement in February 2021.
Kuya has acquired a 100% interest in the property surrounding the Kerr Lake area for $4m and had the option to earn up to a 70% in remaining assets for an additional $1m.
It was required to make $1m in additional payments and invest $4m in exploration activities.
Electra owned the largest land package in the Ontario silver-cobalt mining camp, with more than 50 past-producing mines producing high-grade silver in the region.
Between 2017 and 2019, the company carried out extensive exploration, creating a 3D geological model based on the digital compilation of historic mine workings.
The model was integrated with exploration drilling, geophysical data, and surface bedrock geology maps.
In the last 60 years, more than 600 million ounces of silver and 50 million pounds of cobalt were mined in the district, along with copper and nickel, said the company.