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Battery minerals explorer Firetail Resources (ASX:FTL) has been given an option by York Harbour (TSXV: YORK) to acquire an 80 percent interest in its York Harbour Copper-Zinc-Silver Project in Newfoundland, Canada.
This project comprises six mineral licenses and 189 mineral claims, covering an area of 47.25 square kilometres. The mine has a history of production totalling 100,000 tonnes mined at 3-12% copper, 7% zinc and 1-3 ounces of silver between 1898 and 1913 in a jurisdiction with a global reputation as being miner friendly.
The agreement makes provision for an existing 0.5 per cent net smelter royalty and another 2 per cent net smelter royalty that Firetail will grant to York Harbour for a transaction that is contingent upon the necessary consents and approvals, including approval from the TSX Venture Exchange, as well as meeting customary closing conditions.
York Harbour said in a media release this week that it anticipates finalising the transaction within the next few weeks.
Firetail has a three-year period to exercise the option, which entails a total consideration of AU$498,570 and the completion of 10km of drilling on the York Harbour Project.
Firetail said this week that it would propose a future capital raising targeting ~$AU1,570.000 at a price of $0.04 to facilitate the arrangements. The structure of the capital raise is yet to be determined but is intended to comprise: An $893,000 placement via the issue of 22,325,000 shares, a $595,622 entitlement on the basis of 1 new FTL share for every 10 existing FTL shares held and an $80,000 placement to FTL executive chair Brett Grosvenor.
“We believe that Firetail’s proven board and management team, alongside their seasoned technical team, are the right group to partner with us to move the York Harbour project forward as quickly as possible,” said Blair Naughty, York Harbour Metals president and chief executive, in a news release. “We look forward to becoming shareholders of Firetail which will also provide us upside value on their other two high-profile projects.”
A joint venture between the two companies will be formed after the option is fully exercised, or if it is terminated after at least a 49 per cent interest is exercised in the project.
FTL last traded at 9.2 cents.
