Accend Capital has signed a letter of intent (LoI) to acquire 100% of the Block 103 iron ore property of Canada-based mineral exploration company ML Gold.
Block 103 is a series of Newfoundland and Labrador mineral licences, located in the Labrador Trough, Labrador, approximately 30km north-west of the mining town of Schefferville in Quebec.
Exploration and geological works were carried out by ML Gold from 2011 to 2013, including 28,000m of drilling in 115 holes.
Accend Capital director Simon Clarke said: "We are pleased to announce the acquisition of this world-class iron ore deposit, which we believe is the world's largest wholly owned iron ore magnetite resource.
“With a growing global focus on the need to produce higher quality iron ore products and to reduce the environmental impacts associated with traditional steel making, especially in parts of Asia, the potential to produce clean, high-quality iron ore products from Canada is better than ever."
ML Gold chairman Andy Bowering said: "We have always believed that the Block 103 iron ore property is a world-class asset. We are very pleased with the proposed transaction as it will bring the focus, resources and attention needed to create and unlock value for shareholders of both the company and ML Gold."
Accend Capital has agreed to make a series of cash payments and issue shares at various stages of the deal.
At the closing stage, it has agreed to make cash payment of $200,000 and issue 12,000,000 common shares of the company.
After two-year anniversary of closing, a sum of $800,000 would be paid. Upon completion of a pre-feasibility study on the property, a cash payment of $5,000,000 would be made or an equivalent value of common shares of the company would be issued by the company.
Following completion of bankable feasibility study on the property, it has been agreed that a cash payment of $15,000,000 or an equivalent value of common shares of the company would be issued.
Completion of the transaction is subject to a number of conditions, including satisfactory due diligence, entering a definitive agreement, completing of financing, finalising a technical report for the property, and approval of the TSX Venture Exchange.