(Sharecast News) - Landore Resources announced an agreement to sell its lithium prospects within the Junior Lake Project on Wednesday to the ASX-listed Green Technology Metals (GT1).
The AIM-traded firm's decision came after initially granting GT1 an option to acquire an 80% interest in March.
However, the new sale and purchase agreement would see GT1 acquiring 100% interest, superseding the previous option agreement.
Under the agreement, GT1 would give Landore Resources Canada, a wholly-owned subsidiary of Landore Resources, a cash sum of CAD 1m (£0.6m).
That payment would be received within a month.
Additionally, a share-based consideration would see the issue of 1,628,624 new shares in GT1 to Landore Resources.
Those shares, valued at roughly CAD 0.6m based on GT1's recent average trading price, would amount to 0.59% of GT1's enlarged share capital.
GT1 would also be obliged to satisfy the existing 2.0% net smelter royalty, gaining rights to buy back 1.0% of the existing royalty by paying an additional CAD 1m, presently applicable to the Swole Lake project.
That project encompasses nine mineral claims within Junior Lake, prominently in and around the Swole Lake lithium occurrences.
Landore Resources said the cash would be used to meet its working capital requirements, while it planned to dispose of the newly-acquired GT1 shares in an orderly fashion at an appropriate time.
"Executing this transaction with GT1 is the next step in optimising our portfolio of projects for Landore Resources," said chief executive officer Claude Lemasson.
"As our focus is on the BAM Gold Project, where we expect to begin drilling before year-end, this transaction supports the funding of our activities.
"We will continue to provide regular updates to the market as we progress at BAM."
At 1309 BST, shares in Landore Resources were down 0.89% at 8.92p.
Reporting by Josh White for Sharecast.com.
Landore (LND)