Canada’s EMX Royalty has agreed to divest its Mo-i-Rana volcanogenic massive sulfide (VMS) project in Norway to Sweden-based Mahvie Minerals.
According to the deal, EMX will sell the project in exchange for 9.9% of the issued and outstanding shares in Mahvie.
EMX will also receive annual advance royalty payments, work commitments, 2.5% net smelter return (NSR) royalty interests, and other considerations.
Through an arm’s length transaction, Mahvie will purchase a 100% interest in the EMX subsidiary that owns the project.
The Swedish mining firm will have the option to purchase a 0.5% NSR on the project by paying $1.5m to EMX on the sixth anniversary of the deal.
EMX will receive $25,000 in annual advance royalty (AAR) payments for the project. This will be effective from the third anniversary of the closing of the transaction.
This AAR payment will be increased by $5,000 annually until it reaches $100,000.
EMX will also receive $500,000 in cash or Mahvie shares upon the completion of the project’s pre-feasibility or feasibility study.
EMX will work with Mahvie to explore the Mo-i-Rana project, where substantial exploration upside is said to exist at several historical occurrences and mines.
In a press statement, EMX said: “Much of the historical exploration work was done at a time when VMS models were only poorly understood and only limited portions of the nine individual VMS horizons that exist in the belt have been tested to date.”
The two firms plan to use deposit models and modern exploration methods to make additional discoveries in the belt.
The Mo-i-Rana VMS belt, which was acquired by EMX last year, holds more than 200 mines and prospects with VMS and carbonate replacement (CRD) styles of mineralisation.
Located in central Norway, the VMS belt comprises numerous polymetallic (zinc-lead-copper-silver-gold) occurrences and historical mines.