Regency Gold has signed an agreement to acquire all of the issued and outstanding common shares of Canadian mining company Vanadium North Resources.

Vanadium North holds the 9,600ha Valley of Vanadium project in the Northwest Territories.

The project consists of wholly owned claims and an option to acquire entire mining claims owned by Strategic Metals.

The Valley of Vanadium project covers 19 road accessible mineral claims of 96km² in southwestern Northwest Territories and lies immediately north-west of the former Cantung Mine.

On any commercial production from the project, Strategic Metals will retain a 2% net smelter return royalty. One-half of it may be purchased for $1 million any time before production starts.

“With the acquisition of Vanadium North, Regency will enter the vanadium exploration sector.”

Once the acquisition closes, Regency will own 100% of Vanadium North by issuing an aggregate of nearly 14 million common shares in the capital of the company to the latter’s shareholders.

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Regency will also issue 7.5 million common shares to Strategic Metals.

With the acquisition of Vanadium North, Regency will enter the vanadium exploration sector.

Regency also intends to complete a concurrent private placement financing to raise up to $2m by issuing up to eight million common shares of the company.

The company plans to use the net proceeds from the financing to fund exploration activities at its properties, as well as for working capital purposes.

Completion of the acquisition and financing is subject to various conditions, including the receipt of all required regulatory and third-party consents.

Other requirements comprise the TSXV approval and the satisfaction of customary closing conditions.