Sun Metals will own 100% of the Lorraine project which is located 40km north of the Company's 100% owned Stardust project in northcentral B.C
Sun Metals has entered into a purchase agreement (the “Agreement”) with Teck Resources Limited (“Teck”) to acquire Teck’s 51% joint venture interest in the Lorraine copper-gold project. On satisfaction of the terms of the Agreement, Sun Metals will own 100% of the Lorraine project which is located just 40 kilometres north of the Company’s 100% owned Stardust project in northcentral B.C.
The Lorraine project is host to a precious metal enriched, porphyry copper system. Examples of deposits with this style of mineralization in British Columbia include Galore Creek, New Afton, and Mount Polley.
“Consolidating ownership of Lorraine gives shareholders 100% exposure to two high-quality copper-gold projects in a Tier 1 jurisdiction we know very well. Like the nearby Stardust project, Lorraine demonstrates high grades for its deposit type and shows excellent exploration potential. This acquisition gives shareholders full ownership of two quality copper-gold assets in British Columbia with proximity, creating a larger regional footprint and the potential for future operational advantages,” stated Steve Robertson, Sun Metals’ President and CEO.
Pursuant to the Agreement, Sun Metals will:
Make payments to Teck in either cash or common shares of the Company as follows:
$500,000 payable on the closing date;
$500,000 payable on the first anniversary of the closing date; and
$500,000 payable on the second anniversary of the closing date.
Make additional milestone payments to Teck in either cash or common shares of the Company as follows:
$500,000 upon a Preliminary Economic Assessment;
$2,000,000 upon a Feasibility Study; and
$5,000,000 upon a construction decision.
Teck will retain NSR royalties on closing:
A 1.0% NSR royalty on all claims that are not already burdened by a royalty;
A 0.25% NSR royalty on all claims that are subject to existing royalties.
If Sun Metals sells or options all or a portion of the property to a third party at any time during a 60-month period commencing from the date of the Agreement, Sun Metals will pay to Teck 20% of the sale proceeds, net of exploration expenses incurred on the property by Sun Metals following closing.
Closing is expected to take place in November 2020 and is subject to receipt of all required regulatory and third-party consents and satisfaction of customary closing conditions and documentation.
Source: Company Press Release