Search Minerals Enters Letter of Intent to Purchase 2.5% NSR on Properties Held in Their Critical Rare Earth District in SE Labrador
August 11 2021 - 4:30PM
Search Minerals Inc. (TSXV:
SMY | OTCQB: SHCMF) (“
Search” or
the “
Company”) is pleased to announce that it has
entered into a non-binding letter of intent (“LOI”) to purchase a
2.5% Net Smelter Royalty (“NSR”) from B&A Minerals Limited
(“B&A”) for 15,000,000 common shares in the share capital of
the Company. The transaction will also include some property
transfers between the interested parties. The 15,000,000 common
shares will be restricted and released over 24 months, with 25%
being released every 6 months following the signing of the
definitive agreement. The parties will now start negotiating a
definitive agreement for the proposed transactions which, once
signed, will supersede the LOI.
Net Smelter Royalty
B&A current holds a 3% NSR Royalty
(“Royalty”) over the licenses contained in a large portion of the
Company’s Critical Rare Earth Element District in SE Labrador. Upon
closing of the transactions contemplated in the LOI, B&A will
retain 0.5% NSR on the remaining consolidated 3 licenses including
the Foxtrot project, along with our prospects of Fox Meadow, Silver
Fox, Awesome Fox and up to 20 other prospects. The Company had the
option to purchase 2% of the Royalty for $2,000,000 as per the 2009
B&A Mining Option Agreement (“Option Agreement”). Pursuant to
the terms of the LOI Search will exercise that right along with the
purchase of an additional 0.5% of the Royalty.
Also, for greater certainty, the 2009 Mining
Option Agreement between B&A and Search will, once the
definitive agreement is signed, be fully discharged without any
further existing or future contractual obligations.
Property Transfers
As part of the Royalty purchase, B&A and
Search have agreed to transfer some licenses between the interested
parties. Please see attached map which shows the claims to be
transferred to each applicable party.
B&A and associates will transfer the
following Licenses which are in the proximity of the Company’s Fox
Meadow prospect: Fox Meadow area (027318M, 032539M, part of 027599M
and part of 027429M) and Deep Fox area (027447M). These licenses
will be included in the updated NSR registration and be subject to
the existing 0.5% NSR. Search will grant B&A the quarry/gem
rights on the above 4 licenses transferred in the Fox Meadow area
only after Search has explored/developed those licenses in exchange
for a 3% NSR or similar form of royalty.
Search will transfer license 024083M to B&A
and receive a 0.5% NSR royalty. This license does not form any part
of our Critical Rare Earth Element District.
Greg Andrews, President and CEO states: “We
believe the reduction of the Royalty, will provide flexibility with
our future discussions regarding offtake agreements and funding for
the projects. Our immediate goal remains to advance our Critical
Rare Earth Element District to production. This will require (a)
advancing our DEEP FOX project to a measured and
indicated resource, (b) provide engineering and economic studies
such as Preliminary Economic Assessments (“PEA”) and Feasibility
Studies and (c) develop and submit an Environmental Assessment
report to initiate the environmental and permitting process for
DEEP FOX and FOXTROT. The
reduction of the NSR will be included in the upcoming PEA.”
Corporate Developments:
On April 12, 2021, the Company put into effect a
blackout on trading of the Company’s shares for the management and
board of directors of the Company and InCoR Holdings (the Company’s
controlling shareholder). This blackout is now lifted.
About Search Minerals Inc.
Led by a proven management team and board of
directors, Search is focused on finding and developing Critical
Rare Earths Elements (CREE), Zirconium (Zr) and Hafnium (Hf)
resources within the emerging Port Hope Simpson – St. Lewis CREE
District of South East Labrador. The Company controls a belt 63 km
long and 2 km wide and is road accessible, on tidewater, and
located within 3 local communities. Search has completed a
preliminary economic assessment report for
FOXTROT, and a resource estimate for DEEP
FOX. Search is also working on three exploration prospects
along the belt which include: FOX MEADOW, SILVER
FOX and AWESOME FOX.
Search has continued to optimize our patented
Direct Extraction Process technology with the generous support from
the Department of Tourism, Culture, Industry and Innovation,
Government of Newfoundland and Labrador, and from the Atlantic
Canada Opportunity Agency. We have completed two pilot plant
operations and produced highly purified mixed rare earth carbonate
concentrate and mixed REO concentrate for separation and
refining.
For further information, please
contact:
Greg AndrewsPresident and CEOTel:
604-998-3432E-mail: info@searchminerals.ca
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Cautionary Statement Regarding
“Forward-Looking” Statements:
Except for the statements of historical fact,
this news release contains "forward-looking information" within the
meaning of the applicable Canadian securities legislation that is
based on expectations, estimates and projections as at the date of
this news release. "Forward-looking information" in this news
release includes information about the Company’s proposed
exploration programs described herein, and other forward-looking
information. Factors that could cause actual results to differ
materially from those described in such forward-looking information
include, but are not limited to, the inability to obtain the
necessary resources to complete the exploration programs and poor
exploration results.
The forward-looking information in this news
release reflects the current expectations, assumptions and/or
beliefs of the Company based on information currently available to
the Company. In connection with the forward-looking information
contained in this news release, the Company has made assumptions
about the Company's financial condition and development plans do
not change as a result of unforeseen events, and that the Company
will receive all required regulatory approvals.
Although the Company believes that the
assumptions inherent in the forward-looking information are
reasonable, forward-looking information is not a guarantee of
future performance and accordingly undue reliance should not be put
on such information due to the inherent uncertainty therein. The
Company does not assume any obligation to update the
forward-looking statements, or to update the reasons why actual
results could differ from those reflected in the forward-looking
statements, unless and until required by applicable securities
laws. Additional information identifying risks and uncertainties is
contained in the Company's filings with the Canadian securities
regulators, which filings are available at www.sedar.com.
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