Minco Silver Corporation Announces Norwegian Share Option to Purchase Agreement
MINCO SILVER CORPORATION ANNOUNCES
NORWEGIAN SHARE OPTION TO PURCHASE
AGREEMENT
VANCOUVER, BC
,
July 20, 2022
/CNW/ -
Minco Silver Corporation ("Minco Silver"
or the
"Company")
(TSX: MSV) (OTCQX: MISVF) (WKN: A0ESX5) announced today that it has entered
into a share option to purchase agreement (the "
Option Agreement
") dated
July 15, 2022
(the
"
Effective Date
"), as optionee, with VIAD Royalties AB ("
VIAD
"), a wholly owned subsidiary of EMX
Royalty Corporation ("EMX"), as optionor, to acquire all of the issued and outstanding shares of
VMS Exploration AS, a Norwegian corporation (the "
Target Company
"), free and clear of all
encumbrances. Pursuant to the terms of the Option Agreement, Minco Silver was granted the
exclusive right to acquire (the "
Option
") an 100% interest in the Sagvoll and Sulitjelma properties in
Norway
(collectively, the "
Properties
" and individually, a "
Property
").
Overviews of the projects.
The Sagvoll and Sulitjelma polymetallic projects in
Norway
(See Figure
1) are located in the early Paleozoic VMS belt in
Norway
, which saw numerous districts and mines in
operation from the 1600's through the 1990's.
Sagvoll Project, Caledonian VMS Belt,
Southern Norway
:
The Sagvoll project in southern
Norway
consists of both VMS and magmatic nickel-copper sulfide mineralization developed along the
Caledonian orogenic trend. This metallogenic region represents a tectonically displaced continuation
of the Cambrian-Ordovician VMS belts in northeastern
North America
, which includes the
Buchans
and Bathurst VMS camps in eastern
Canada
, and also the Avoca VMS district in
Ireland
. As such,
this represents one of the more prolific VMS belts in the world in terms of total production from its
various mining districts, albeit now tectonically displaced and occurring along opposite sides of the
Atlantic Ocean.
At Sagvoll, mineralization and historic mining areas are positioned along a 13-kilometre trend.
Although multiple historic mines are present in the area, only limited historical drilling has taken
place, most of which were drilled over 100 years ago. Many prospects and mining areas remain
untested. The most recent work conducted in the district took place in 2006, when Xstrata PLC
("Xstrata") flew airborne geophysical surveys and identified five prioritized nickel-copper targets and
11 VMS targets for further exploration and drill testing[1]. However, the follow-up exploration work
was never completed.
EMX has identified several "walk-up" style drill targets based upon the historical and more recent
Xstrata data, and will work closely with Minco to systematically explore the area.
Sulitjelma District,
Central Norway
:
The Sulitjelma VMS district was discovered in 1858 and was
mined from 1891 to1991. Sulitjelma was one of the last operating base metal mines in
Norway
. VMS
style mineralization occurs along a trend that extends over 20 kilometres and is developed along
multiple stratigraphic horizons and structurally repeated sections. Metamorphism and deformation
have caused thickening and repetition of mineralized horizons in the area. The district produced over
25 million tonnes, averaging 1.84% copper, 0.86% inc, 10 g/t silver and 0.25 g/t gold [2]. Significant
historical resources were left unmined at the time of closure in the early 1990's.
1 Internal Xstrata PLC internal report by Beaudoin for A/S Sulfidmalm Project 206, "Report of field work in the Skjarkerdalen area, central Norway: Summer 2006". On file at
Geological Survey of Norway (NGU).
2 Historical production data from the Geological Survey of Norway (NGU) Ore Database, Deposit Area 1841-024, updated Dec 18, 2017.
The district has seen very little work since the mines closed. Recent (2014) airborne geophysical
surveys highlighted multiple conductive anomalies along the primary trend of mineralization that have
not yet been drill tested. EMX geologists have found outcropping expressions of VMS style
mineralization, also along trend, that have not been developed or drill tested.
In order to exercise the Option, Minco Silver will:
1
.
Pay to VIAD:
i
.
CDN
$60,000
upon execution of the Option Agreement (which has been paid);
ii
.
A further CDN
$35,000
on or before the first anniversary of the Effective Date (the "
Option
Expiry Date
"); and
iii
.
A further
NOK 75,000
(in Norwegian Krone) on or before the Option Expiry Date as
reimbursement for the establishment of the Target Company; and
2
.
Issue to VIAD one percent (1%) of the issued and outstanding shares of Minco Silver, up to a
maximum of 1,000,000 shares, provided that in the event that a proposed agreement for certain
other properties in
Sweden
(the "
Swedish Agreement
") has been terminated or has not been
entered into prior to the Option Expiry Date, then Minco Silver will issue to VIAD two percent
(2%) of the issued and outstanding shares of Minco Silver, or up to a maximum of 2,000,000
shares; all shares issued by Minco Silver to VIAD will be subject to the voluntary pooling
restrictions described below
3
.
Incur minimum exploration expenditures of CDN
$100,000
on each of the Properties, on or
before the Option Expiry Date; and
4
.
Deliver to VIAD a royalty agreement for a 2.5% net smelter returns royalty from any production
of the Properties (the "
NSR Royalty
"), subject to Minco Silver's right to buy down one-fifth of
the NSR Royalty to reduce it to 2.0%, upon payment to VIAD of CDN
$1.0 million
on or before
the 6
th
anniversary of the Effective Date, and subject to VIAD's minimum annual royalty
payments described below.
After the exercise of the Option and the date of the transfer of the Properties or either of them to
Minco (the "
Closing Date
"), Minco Silver must also incur a total of CDN
$4.0 million
in minimum
exploration expenditures on the Properties and any property under the Swedish Agreement, as
follows:
$200,000
within six months of the Closing Date;
A further:
$2.1 million
on the Properties (and any property under the Swedish Agreement, if any); or
$1.4 million
on the two Properties, provided that no less than
$200,000
in exploration is
spent on each Property; or
in the event only one of the Properties is retained, then a further
$700,000
, on or before
the third anniversary of the Effective Date;
Cumulative exploration expenditures of
$4.0 million
on or before the fifth anniversary of the
Effective Date.
In addition, within six months of the Closing Date, Minco Silver will issue to VIAD an additional
number of common shares equal to 0.5% of the issued and outstanding shares of the Company, up
to a maximum of 500,000 shares.
Upon completion of a preliminary economic assessment for each Property or any portion thereof,
and provided that the Property has been retained and not relinquished, the Company will pay VIAD a
one-time payment equal to CDN
$250,000
for that Property. Upon completion of a feasibility study
for each Property or any portion thereof, and provided that the Property has been retained and not
relinquished, the Company will also pay VIAD a one-time payment equal to CDN
$250,000
for that
Property. These payments may also be made in common shares of the Company, provided that
VIAD's shareholdings do not exceed 9.9% at any time.
All share issuances to VIAD will be based on the volume weighted average trading price of the
Company's shares on the Exchange for the twenty (20) trading days immediately preceding the date
which ends two trading days prior to Minco Silver's announcement of any proposed issuance of the
shares, and the shares will be subject to resale restrictions under applicable securities legislation for
four months and a day from their date of issue. The shares issued to VIAD will be subject to pooling
restrictions, whereby 25% will be released to VIAD on the Closing Date, and a further three
installments of 25% will be released every three months from the Closing Date, until fully released.
Commencing on the third anniversary of the Effective Date, Minco Silver will pay VIAD an advanced
annual royalty of CDN
$25,000
(the "
Annual Advance Royalty
") on each of the Properties retained,
until the commencement of commercial production. The amount of the Annual Advanced Royalty
payment will increase by fifteen percent (15%) each year over the prior year, and shall be payable
on or before each subsequent anniversary of the Effective Date, provided that such Annual
Advanced Royalty payments will be capped at CDN
$75,000
per year for each of the Properties
retained. All such minimum Annual Advance Royalty payments paid by the Company prior to the
commencement of commercial production for a Property will be credited towards and offset the
NSR Royalty payments due to VIAD after the commencement of commercial production.
The Company will also be responsible to maintain the Properties in good standing under applicable
Norwegian mining laws, and report all exploration expenditures, before and after the Closing Date.
MINCO SILVER CORPORATION
Ken Cai
,
Chairman and CEO
Qualified Person
Mr. Fang Wan, P.Geo, of Minco Silver, is a Qualified Person ("QP") as defined by National
Instrument 43-101 ("
NI 43-101
"), and has approved the scientific and technical disclosure in this
news release and prepared or supervised its preparation.
Cautionary Note
The information contained herein may contain "forward-looking statements" within the meaning of
applicable securities legislation. Forward-looking statements relate to information that is based on
numerous assumptions and involve known and unknown risks, uncertainties and other factors,
including risks inherent in mineral exploration and development, which may cause the actual results,
performance, or achievements of the Company to be materially different from any projected future
results, performance, or achievements expressed or implied by such forward-looking statements.
Such information contained herein represents management's best judgment as of the date hereof
based on information currently available. The Company does not assume the obligation to update
any forward-looking statement.
MINCO SILVER CORPORATION ANNOUNCES NORWEGIAN SHARE OPTION TO PURCHASE
AGREEMENT (CNW Group/Minco Silver Corporation)
SOURCE
Minco Silver Corporation
View original content to download multimedia:
http://www.newswire.ca/en/releases/archive/July2022/20/c7681.html
%SEDAR: 00022426E
For further information:
please visit the Company's website at www.mincosilver.ca, or contact: the
Company at
2060 - 1055 W. Georgia St., Vancouver, BC, Canada V6E 3R5, Tel: (604)688-8002,
Fax: (604)688-8030, E-mail: [email protected], Website: www.mincosilver.ca
CO: Minco Silver Corporation
CNW 06:30e 20-JUL-22