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(Sharecast News) - Power Metal Resources announced the early completion of the Authier North lithium project earn-in on Wednesday, securing a 100% interest in the project.
The AIM-traded firm said the earn-in agreement, initially outlined in July 2021, pertained to two properties - Authier North and Duval East, located in the Val-d'Or mining camp in Quebec, Canada, around 45 kilometres northwest of Val-d'Or and 500 kilometres northwest of Montreal.
It said it had fulfilled the cash and equity payments required under the original agreement, as well as the first-year exploration spend commitment.
The company had now reached an agreement with Eagle Ridge Mining, based in Barrie, Ontario, to satisfy the remaining obligations for the 100% earn-in through cash and equity payments.
Power Metal said the final payments to secure the earn-in included CAD 25,000 in cash and the issue of CAD 75,000 (£43,941) worth of shares to Eagle Ridge Mining.
Based on the Power Metal 10-day volume weighted average price of 0.705835p immediately prior to earn-in completion, that equated to the issue of 6,225,392 new Power Metal shares.
The exploration commitments for years two and three, for a respective CAD 50,000 and CAD 100,000, had been waived.
While the agreement had been finalised, there would be a pre-existing 1% net smelter royalty (NSR) over the properties that would remain in effect.
Additionally, Power Metal would grant the vendors a further 1.25% NSR, with 0.5% of the vendor NSR able to be repurchased by Power Metal Canada at any time for CAD 0.5m in cash.
Thus, prior to any potential buyback, the total NSRs amounted to 2.25% over the properties.
Following completion of the earn-in, the ownership of the properties would be held through Power Metal's wholly-owned UK subsidiary, ION Battery Resources, and its local operating subsidiary in Canada.
Power Metal said it had also chosen to settle professional fees related to the earn-in amounting to £65,000 by issuing 9,208,951 new shares.
Of those, 3,541,904 were issued to SP Angel Corporate Finance, the company's nominated adviser and joint broker, in lieu of fees worth £25,000.
The remaining 5,667,047 fee shares were issued to another corporate adviser in lieu of fees amounting to £40,000.
"I am delighted to secure a 100% interest in the Authier North Project for Power Metal through this transaction, which sees an expedited completion of the earn-in," said chief executive officer Sean Wade.
"Given the importance of lithium in the future growth and development of green technology globally, it is important to retain exposure to this metal.
"With the earn-in of Authier North now complete pending payment of consideration, we are also able to move forward with commercial plans for ION Battery Resources which will now hold this 100% interest and further on that to follow in due course."
At 1003 BST, shares in Power Metal Resources were up 0.38% at 0.65p.
Reporting by Josh White for Sharecast.com.
