Base and precious metals explorer Intra Energy (ASX:IEC) has struck a binding deal to acquire the Llama Lithium Project in the James Bay region of Quebec, Canada.
The company reports it will acquire the project from Canadian geological services company DG Resource Management for CAD$950,000 cash, 195 million IEC shares, and 97.5 million IEC options exercisable at $0.015 each for a 2-year period following the date of issue.
Further, as part of the deal, Intra will issue to DG Resource Management 150 million performance rights vesting into shares in IEC on a 1-to-1 basis. Of these performance rights, 50 million will be vested into IEC shares once at least 5 rock chip samples record grades of at least 1% Li20 within 5 years of the date of issue.
A further 50 million performance rights will be vested into IEC shares when Intra either drills an intercept of at least 5m @ 1% Li2O representing lithium mineralisation or announces a surface channel sample interval of at least 5m @ 1% Li2O at Llama within 5 years of the date of issue.
The remaining 50 million performance rights will be vested into IEC shares if IEC delineates a JORC-compliant Mineral Resource of at least 10 million tonnes with a grade of at least 1% Li2O at Llama within 5 years of the date of issue. The issue of the consideration shares, consideration options, and performance rights to the vendors will be subject to shareholder approval.
Intra reports 97.5 million of the consideration shares will be subject to a voluntary escrow period of 6 months from completion.
The company will also grant DG Resource Management a 2.75% gross smelter return royalty from revenue generated from production at Llama effective from completion.
Intra will be allowed to buy back this royalty from 2.75% to 2% for CAD$2 million within 2 years of completion, or CAD$5 million after the first 2 years.
Intra intends to start exploration at Llama immediately once shareholders approve the acquisition. The company intends to run a detailed geological mapping and sampling campaign in August, as well as use high-resolution aerial imagery and magnetics, to define targets. If successful, this will be followed by diamond drilling.
Commenting on the acquisition, Intra Energy Managing Director Benjamin Dunn says: “The acquisition of the Llama Lithium Project from DG Resource Management, a renowned Canadian geological services company, further solidifies our confidence in the project’s potential.
DGRM has a remarkable track record of identifying successful projects in the region, including the Corvette Property, which was recently vended to Patriot Battery Metals (ASX: PMT).
“As a significant addition to our existing exploration portfolio, which includes our Yalgarra Cu-Ni-PGE Project in Western Australia, the Llama Lithium Project represents an exciting opportunity for IEC”
As a significant addition to our existing exploration portfolio, which includes our Yalgarra Cu-Ni-PGE Project in Western Australia, the Llama Lithium Project represents an exciting opportunity for IEC.
We are eager to commence exploration activities in collaboration with Dahrouge Geological Consulting immediately upon completion of the acquisition. Our strategic focus remains on identifying and developing high-value future-facing minerals assets, and the Llama Lithium Project aligns perfectly with our long-term growth objectives.”
To help fund the acquisition, Intra says it has received binding commitments from sophisticated and professional investors for a conditional placement to raise up to $3.6 million through the issue of 720 million shares at an issue price of $0.005 per share. This placement includes a 1 for 2 free-attaching option exercisable at $0.015, which expires 2 years after the date of issue.
The company says the placement will ensure it is fully funded to complete the acquisition and undertake its exploration objectives at Llama over the next 12 months. Funds raised under the placement will also be applied to Intra’s existing projects and working capital.
The issue of new securities under the placement remains subject to the completion of the acquisition and the receipt of all relevant shareholder approvals.
Intra Energy is an ASX-listed base and precious metals explorer that holds the Yalgarra Project in Western Australia and Louth Project in New South Wales.
The Llama Lithium Project consists of 123 mineral claims spanning 6,305 hectares in the James Bay region of Quebec, Canada.
Write to Harry Mulholland at Mining.com.au
