Teako Minerals Corp. (CSE: TMIN) (the “Company” or “Teako”) is pleased to announce that it has executed a definitive agreement (the “Agreement”) with Capella Minerals Ltd. (TSXV: CMIL) (“Capella”) pursuant to which Teako will acquire a 90% ownership interest in the copper-zinc-cobalt (“Cu-Zn-Co”) Løkken project in Trøndelag, Norway (the “Project”). The Løkken Project will combine with the Company’s adjacent Lomunda claims of the Company’s Lomunda and Venna projects and will, moving forward, collectively be referred to as the Løkken & Venna Projects.
The Agreement represents a significant strategic advancement for the Company, enabling the consolidation of all prospective bedrock for Løkken-type volcanogenic massive sulfide deposits in the premier historic mining district of Trøndelag. This also provides the Company with advanced drill targets, including the drill-ready Åmot target, which the Company intends to drill in the winter of 2024/2025, and the Høydal target, which may be drilled subject to permitting.
Highlights:
- Teako to acquire a 90% ownership interest in Capella’s Løkken Cu-Zn-Co massive sulfide (“VMS”) project, Trøndelag, central Norway. The acquisition of Capella’s Løkken project allows Teako to further consolidate a district-scale exploration package at Løkken-Venna with significant potential for the discovery of new high-grade Løkken-style VMS deposits.
- The Løkken project contains the former Løkken mining operations (reported production of 24MT @ 2.3% Cu + 1.9% Zn1), together with the drill-ready Åmot target and four priority satellite targets with potential for new VMS discoveries (Høydal, Dragset-Halsatasen, Fjellslett, and Grefstofjellet).
- Teako’s immediate priorities will be to prepare for a maiden drill program on the Åmot VMS target and potentially the Høydal target through the twinning of select historical drill holes, subject to permitting, whilst advancing additional Cu-Zn-Co targets within the broader Løkken-Venna area to drill-ready status.
- Teako has arranged a concurrent non-brokered private placement financing of up to 11,111,111 Common Shares at a price of CAD$0.09 per Common Share for aggregate gross proceeds of up to CAD$1,000,000. Teako intends to complete the Offering to fund the cash consideration payable in connection with the Agreement, and provide funding for drilling as well as general and administrative expenses.
Pursuant to the Agreement, Teako must pay the following consideration:
(i) Issue to Capella 2,500,000 common shares (“Common Shares”) on or before August 30, 2024; and
(ii) Pay to Capella CAD$350,000 in aggregate cash consideration on or before August 30, 2024;
Additionally, Teako has agreed to the following exploration obligations on the Project: (i) completion of a drill program on the Åmot Target of the Project within 12 months of the Agreement, subject to drill permitting being confirmed; and (ii) completion of sufficient exploration work to develop a further two targets on the Project to drill-ready status within 24 months of the Agreement.
Pursuant to the terms of the Agreement, Teako will be responsible for all exploration costs associated with the Project prior to making a final investment decision with respect to commencing production. If, at any time, while Capella still maintains its 10% interest in the Project, Teako makes a final investment decision to proceed with commercial production, the parties will enter into a definitive joint venture agreement relating to their respective rights and obligations. Any accrued but unpaid costs for the account of Capella shall be paid by way of netting out 25% of the amount of any distribution by the joint venture to Capella until such amounts are recovered. In the event the mine is closed prior to final repayment, the balance outstanding payable by Capella will be forgiven clear of any further obligations.
The Agreement provides for certain co-sale rights and obligations, permitting or obligating Capella, as applicable, to sell its 10% interest in the event that Teako subsequently sells its interest in the Project. Further, the Agreement provides that prior to consummating any transaction to sell its interest, Teako must first offer to sell the interest to Capella on the same terms and conditions.
The Common Shares issuable to Capella will be subject to a hold period of four months and one day in accordance with applicable securities laws. Additionally, the Common Shares will be subject to contractual restrictions on transfer as follows: (i) 33% of the Common Shares will be subject to a four-month and one-day restriction from the issue date; (ii) 33% of the Common Shares will be subject to an eight-month restriction from the issue date; and (iii) the balance of the Common Shares will be subject to a one-year restriction from the issue date.
The Project is subject to a 2.5% Net Smelter Return royalty (“NSR”) payable to Eurasian Minerals Sweden AB. Pursuant to the NSR, 0.5% of the royalty may be repurchased at any time for US$1,000,000. The NSR provides for annual advanced royalty payments of USD$40,000 for the first year, increasing by USD$5,000 per annum to a maximum of USD$75,000 (the “AAR Obligation”). Under the terms of the Agreement, Teako will assume all payment obligations associated with the AAR Obligation.
