Nunavik Nickel Mines has signed a deal with the option to buy a 100% interest in 61 of Golden Valley Mine's grassroots properties.
Under the option agreement, Nunavik Nickel must spend $4m for exploration and other mining operations on the properties before 31 December 2021.
Expenditure targets have been fixed in a time-based schedule, with $500,000 to be incurred before 31 December 2018, with a further $750,000 to be spent before 31 December 2019. In addition, $1m is due before 31 December 2020, and the remaining $1.75m by 31 December 2021.
As a consideration for the option, Nunavik Nickel will issue 16.6 million common shares to Golden Valley at a price of $0.12 each for an aggregate value of $2m.
Furthermore, Nunavik Nickel has agreed to make royalty payments to Golden Valley on the net smelter returns from the Properties fixed at 1.25%. Nunavik Nickel can repurchase 1% of the royalty by paying Golden Valley $5m at Nunavik Nickel’s option, either in cash or shares at a deemed price per share equal to the market price of Nunavik Nickel’s shares at the time of such election.
If Nunavik Nickel has issued the shares and incurred the expenditures as mentioned in the option agreement, it may exercise the option before 31 December 2021.
Golden Valley will retain 17 of its currently held properties either in whole or in part according to its interests in the various joint venture agreements it has entered with third-parties. The company will also continue to meet the listing requirements to be a Tier 2 mining issuer on the TSX Venture Exchange.
The transaction outlined in the option agreement is subject to acceptance by the TSX Venture Exchange.