Champion Electric Enters into Binding LOI to Option Baner Gold Project in Idaho to Prestwick Capital Corporation
Champion Electric Enters into Binding LOI to
Option Baner Gold Project in Idaho to
Prestwick Capital Corporation
All amounts expressed are in Canadian dollars
Toronto, Ontario--(Newsfile Corp. - May 15, 2024) -
Champion Electric Metals Inc.
(CSE: LTHM)
(OTCQB: CHELF) (FSE: 1QB0) ("
Champion Electric
" or the "
Company
") is pleased to announce that
it has entered into a binding letter of intent (the "
LOI
") with respect to a transaction (the "
Transaction
")
whereby Prestwick Capital Corporation Limited (TSXV: PWIK) ("Prestwick") will obtain an option (the
"
Option
") to acquire from Champion Electric a 100% undivided interest in and to the mineral claims
comprising the Baner gold project located in Idaho County, Idaho, USA (the "
Baner Gold Project
"). The
Baner Gold Project is comprised of 215 unpatented lode claims covering approximately
4,520 acres
(1,829 hectares)
.
Jonathan Buick, President and CEO, commented
: "Once Champion Electric made the decision to
pivot to critical minerals, we've been looking for a partner who would be able to advance our gold assets
and give them the attention they deserve. The Baner Gold Project has always been very promising, with
results strong enough that it got the attention of Prestwick's founders. It's an experienced group of people
that has had numerous world-class mining successes, including Kirkland Lake Gold and Rupert
Resources, they have the right experience to bring capital and expertise to explore and develop the
Baner Gold Project while Champion focuses on its lithium and cobalt operations."
Prestwick is a "capital pool company" as defined in the policies of the TSX Venture Exchange (the
"
Exchange
") and intends the Transaction to constitute its Qualifying Transaction (as such term is
defined in the policies of the Exchange).
The Transaction
The LOI contemplates the negotiation and execution of a binding definitive option agreement (the
"
Option Agreement
"), and to exercise the Option, Prestwick will be required to make cash payments
and issue securities as follows:
1
.
Prestwick has paid Champion $25,000 upon execution of the LOI.
2
.
On completion of the Transaction, paying or issuing (as applicable) to Champion:
a
.
$75,000;
b
.
1.1 million common shares of Prestwick ("
Common Shares
"); and
c
.
warrants to purchase up to 200,000 Common Shares at $0.30 per share for two (2) years
from the date of issuance.
3
.
Paying or issuing (as applicable) to Champion within 18 months from the completion of the
Transaction ("
Payment #1 Date
"):
a
.
$350,000;
b
.
200,000 Common Shares; and
c
.
warrants to purchase up to 200,000 Common Shares at the last closing price for the
Common Shares prior to the date of issuance, for two (2) years from the date of issuance.
4
.
Paying or issuing (as applicable) to Champion within 12 months from the Payment #1 Date
("
Payment #2 Date
"):
a
.
$500,000; and
b
.
warrants to purchase up to 200,000 Common Shares at the last closing price for the
Common Shares prior to the date of issuance, for two (2) years from the date of issuance.
Upon satisfaction of the payments and securities issuances above, the Option will be deemed to be
exercised and a 100% undivided interest in the Baner Gold Project will be transferred to Prestwick, free
and clear of all encumbrances, subject to a 1% net smelter return royalty (the "
NSR
") in favour of
Champion. Prestwick may buy-back the NSR in consideration for payment of $7.5 million to Champion.
The Common Shares issuable under the Option will be deemed to be issued at a price equal to $0.235
per share, being the price of the Common Shares on the Exchange on May 14, 2024.
These Common
Shares will be subject to hold periods under applicable securities laws, and subject to voluntary escrow
lasting until Payment #2 Date, with an escrow release schedule to be negotiated and set forth in the
Option Agreement.
Prestwick intends to use its working capital and a concurrent financing to be completed in connection
with the Transaction to make the cash payments required under the terms of the Option. During the term
of the Option, Prestwick will have the exclusive right to manage and operate all work programs carried
out on the Baner Gold Project in its sole discretion. Prestwick will also be responsible for maintaining the
Baner Gold Project in good standing through such time.
The completion of the Transaction is subject to a number of conditions, including Prestwick completing
its confirmatory due diligence in respect of the Baner Gold Project, execution of the Option Agreement
(by no later than July 12, 2024), Exchange approval, obtaining all necessary third-party consents, and the
Baner Gold Project satisfying the Exchange's Initial Listing Requirements for a Mining Issuer (pursuant to
Policy 2.1 –
Initial Listing Requirements
of the Exchange), including, without limitation, the public float
requirements.
The Common Shares are presently halted, and it is expected they will remain halted until the Transaction
is completed and approved by the Exchange.
The proposed Transaction will not constitute a "Non-Arm's Length Qualifying Transaction" (as such terms
is defined by the Exchange), because of which, it is not expected that Prestwick will be required to
obtain shareholder approval for the Transaction.
Investors should refer to Prestwick's current and future news releases to find out more about
management, directors and insiders of Prestwick upon completion of the Transaction, concurrent
financing terms, sponsorship, finder's fees payable and other material information as it becomes
available.
Champion Electric Metals maintains several other significant polymetallic projects and cobalt properties
in Idaho. The Company has opened a data room to share data with interested parties on possible
transactions for the Champagne polymetallic project in Butte County. For anybody interested, please
contact
.
About Champion Electric Metals Inc.
Champion Electric is a discovery-focused exploration company that is committed to advancing its highly
prospective lithium properties in Quebec, Canada and cobalt properties in Idaho, United States. In
addition, the Company owns the Baner gold project in Idaho County and the Champagne polymetallic
project in Butte County near Arco.
The Company's shares trade on the CSE under the trading symbol "LTHM", on the OTCQB under the
trading symbol "CHELF", and on the Frankfurt Stock Exchange under the symbol "1QB0". Champion
Electric strives to be a responsible environmental steward, stakeholder and contributing citizen to the
local communities where it operates, taking its social license seriously, employing local community
members and service providers at its operations whenever possible.
ON BEHALF OF THE BOARD OF CHAMPION ELECTRIC
"Jonathan Buick"
Jonathan Buick, President and CEO
To learn more, please visit the Company's SEDAR profile at
www.sedarplus.ca
or the Company's
corporate website at
www.champem.com
.
For further information, please contact:
Investor Relations and Communications
Phone: (905) 688-9115
Email:
THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION, NOR SHALL THERE BE ANY OFFER,
SALE, OR SOLICITATION OF SECURITIES IN ANY STATE IN THE UNITED STATES IN WHICH SUCH
OFFER, SALE, OR SOLICITATION WOULD BE UNLAWFUL.
Cautionary Statements
Neither the Canadian Securities Exchange nor its regulation services provider has reviewed or
accepted responsibility for the adequacy or accuracy of this press release. This press release may
include forward-looking information within the meaning of Canadian securities legislation, concerning
the business of the Company. Forward-looking information is based on certain key expectations and
assumptions made by management of the Company, including closing of the Transactions and the
prospectivity of the Projects for lithium. Although the Company believes that the expectations and
assumptions on which such forward-looking information is based on are reasonable, undue reliance
should not be placed on the forward-looking information because the Company can give no
assurance that they will prove to be correct. Forward-looking statements contained in this press
release are made as of the date of this press release. The Company disclaims any intent or obligation
to update publicly any forward-looking information, whether as a result of new information, future
events or results or otherwise, other than as required by applicable securities laws.
The Projects are at an early stage of exploration, and the Company cautions that the qualified
persons who have reviewed and approved this news release have not verified scientific or technical
information produced by third parties.
Completion of the Transaction is subject to a number of conditions, including but not limited to,
Exchange acceptance, and if applicable pursuant to Exchange Requirements, majority of the minority
shareholder approval. There can be no assurance that the Transaction will be completed as proposed
or at all. Investors are cautioned that, except as disclosed in the management information circular or
filing statement to be prepared in connection with the Transaction, any information released or
received with respect to the Transaction may not be accurate or complete and should not be relied
upon. Trading in the securities of a capital pool company should be considered highly speculative.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/209180