Cohiba Minerals inks binding agreement to acquire 4 lithium properties in Canada

Melbourne-based Cohiba Minerals (ASX:CHK) has executed a binding agreement to acquire Maple Minerals 2, which holds the rights to purchase 4 lithium and rare earth element (REE) properties in Ontario, Canada.

Maple’s project portfolio consists of the Big Rock, Rogers Creek, Ottertail, and Gathering Lake lithium properties, which collectively cover 148km-square within known lithium terranes.

Under the terms of the proposed acquisition, Cohiba will issue Maple 50 million shares and up to 125 million unlisted performance rights. 

Of the performance rights, 62.5 million will be issued to Maple in the first tranche of the deal, subject to Cohiba discovering and reporting no less than 5 rock chip samples from the mining claims at no less than 1% Li2O each. These performance rights will lapse if the milestone is not achieved within 48 months.

The second tranche of 62.5 million performance rights will be issued to Maple once Cohiba reports a drill intercept or channel sample of no less than 10m at more than 1% Li2O. These rights will also lapse if the milestone is not achieved by 48 months.

Cohiba will also be required to pay CAD$259,000 to Maple and grant it a 1.5% net smelter royalty (NSR) in respect to any minerals produced within the boundaries of the claim. The company can re-purchase 0.5% of the NSR for $500,000.

Further, as a condition of the proposed acquisition, Cohiba reports it has received ‘firm and irrevocable’ commitments from professional and sophisticated investors to raise $1.75 million in a 2-tranche placement.

All up, Cohiba will issue 350 million shares to professional and sophisticated investors at $0.005 to raise the funds. The company will also issue a free-attaching option for every new share issued.

The proceeds from the placement will be used to fund the proposed acquisition, exploration costs on the newly acquired projects and current projects, and working capital requirements. PAC Partners acted as the lead manager for the placement and will receive 40 million options as partial consideration for the placement.

Cohiba says the proposed acquisition is subject to shareholder approval, which is required for the issue of consideration shares, performance rights, and shares under tranche 2 of the placement.

The company reports it will undertake a ‘comprehensive’ field investigation during the upcoming summer season using the services of local geological consultants to deliver these programs across Canada.

From July to September 2023, Cohiba will review historical data, complete detailed geological mapping, undertake a comprehensive and systematic geochemical sampling program, review field data and associated reports, receive recommendations for follow-up work, undertake target prioritisation work, and complete necessary statutory documents.

Depending on recommendations, the company will complete aeromagnetic and multispectral surveys, along with reverse circulation (RC) drilling over strategic targets in December 2023.

Commenting on the proposed acquisition, Cohiba Minerals Chief Executive Officer (CEO) Andrew Graham says: “We are delighted to have been able to execute binding agreements for this acquisition and secure these strategic tenements within known lithium and rare earth element terranes.

Northwest Ontario is recognised as a key lithium province and with highly attractive geological and structural precursors within close proximity to known lithium resources we are confident of yielding exploration success.

Canada is forecast to be a significant supplier of critical minerals, including lithium, which is evident through the recent deal between Green Technology Metals (ASX:GT1) and LG Energy Solutions which saw LGES invest $20 million in GT1 to become a substantial shareholder and major offtake partner.

Following an extensive due diligence process, we are confident that we have secured an exceptional portfolio of projects”

Following an extensive due diligence process, we are confident that we have secured an exceptional portfolio of projects and look forward to undertaking some detailed reconnaissance work in the upcoming summer season.”

On the back of today’s news, shares in Cohiba Minerals have spiked 20 per cent to $0.006 at 12:49pm AEST.

Cohiba Minerals is an ASX-listed company focused on its Olympic Domain tenements in South Australia. Along with the newly acquired lithium properties in Ontario, Canada, the company also has projects in Western Australia and Queensland.

Write to Harry Mulholland at Mining.com.au

Images: Cohiba Minerals Ltd
Written By Harry Mulholland
Hailing from the Central Coast region of NSW, Harry is a passionate journalist with a background in print, radio and ESG news. When not bashing away on his keyboard, he can be found brewing a coffee or playing with his dog.