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LONDON (Alliance News) - Landore Resources Ltd shares fell a quarter on Wednesday after striking a deal which may lead to the sale of its Root Lake lithium property in Ontario, Canada by entering into an option agreement with Ardiden Ltd.
Landore shares were down 26% to 0.425 pence per share on Wednesday.
The Root Lake property carries no value on Landore's balance sheet, and the company has not been spending anything on this "non-core" asset over the past year.
Ardiden has acquired an option that gives it the right to fully acquire Landore's Root Lake property, and will pay a CAD50,000 non-refundable deposit to the company if it exercises the option.
Ardiden will also pay Landore CAD150,000 in cash once the deal is completed and a further CAD150,000 worth of Ardiden shares.
Landore also will be awarded a 3% net smelter royalty from the minerals produced from the Root Lake property, which will be agreed under terms in a standard royalty agreement. The royalty agreement will include the right for Ardiden to purchase 50% of the royalty from Landore for CAD1.0 million - meaning Landore's royalty would drop to 1.5% from 3%.
Ardiden reserves the right to withdraw from the option agreement at any time. Landore will retain 100% of the Root Lake rights should Ardiden fail to complete any requirements of the option agreement.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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