Magna Terra Minerals has signed a letter of intent (LOI) to sell its minority interest in the Verneuil Project in Canada to Quebec’s mineral exploration firm Soquem.

Since 1997, the Canadian asset has been governed by an option and joint venture agreement signed between Soquem and Normabec Mining Resources.

However, a deal was signed in 2009 between Brionor Resources, a predecessor company to Magna Terra, with Normabec to assume the Verneuil option.

The sale of the stake in the Verneuil project comes as Magna Terra considers it as a non-core asset in its exploration property portfolio.

With the sale, Magna Terra intends to focus on the Cape Spencer and Great Northern projects in Atlantic Canada.

After non-participation by Magna Terra in recent exploration programmes conducted by Soquem, Magna Terra’s ownership interest in the joint venture has been reduced to a 32.778% undivided interest.

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According to the agreement, Magna Terra will receive a $100,000 cash payment on the closing of the transaction, as well as a 0.5% net smelter royalty (NSR) of the project.

Magna Terra Minerals president and CEO Lew Lawrick said: “We are pleased to monetise this non-core piece of our extensive exploration portfolio, and it allows Soquem the maximum flexibility to advance Verneuil going forward, which is an ideal outcome for both parties.

“This transaction continues to allow Magna Terra to focus on its high-potential projects in Atlantic Canada while also providing continued value for shareholders through vending or partnering non-core assets.”

The firm plans to use proceeds from non-core assets’ sales to partially pay for interest in core property assets.

Planned for completion or before 10 September 2021, the deal is subject to signing of a definitive purchase and sale agreement.