6th Oct 2015 09:26
LONDON (Alliance News) - Alba Mineral Resources PLC on Tuesday said it has signed an agreement with Artemis Resources Ltd which grants Alba an option to earn up to 70% of a graphite project near Nanortalik in southern Greenland.
The licence area comprises the Amitsoq graphite mine and is prospective for gold, copper, nickel and platinum group elements as well as for graphite, the company said.
In consideration for securing an option to earn into the project, Alba will pay Artemis GBP50,000 in cash and will fund a minimum of GBP52,000 in exploration costs by December 31.
Alba said it may elect to earn a 25% interest in the project by March 31, 2016, through the issue of GBP50,000 Alba shares to Artemis and by funding a minimum of a further GBP146,000 in exploration costs by December 31, 2016.
It may then elect to earn an additional 24% interest by March 31, 2017, through the issue of a further GBP50,000 Alba shares and by funding a minimum of a further GBP146,000 in exploration costs by December 31, 2016.
Thereafter, Alba will have the right to increase its interest to 70% by meeting the 2017/2018 commitment of GBP438,000, subject to approval from the Greenland government and the renewal of the existing licence, which expires on December 31, 2017, for a further five years.
During the earn-in period, Alba will join a joint venture board with Artemis.
Once Alba's holding reaches 70%, it will take over Artemis's rights and obligations under a put and call option in respect of the partially free carried 10% interest currently held by a minority shareholder. Artemis will retain a 20% holding.
Following Alba acquiring a majority interest in the project, and upon either a bankable feasibility study being completed which confirms the economic viability of the project or upon the commencement of commercial production, Alba will issue a further GBP150,000 shares to Artemis.
"The option that Alba has secured to earn into the project gives the company the opportunity to explore in the very southern part of Greenland and on a similar latitude to the Shetland Islands, in a previously mined area where there is significant historic geological information," Chief Executive Mike Nott said in a statement.
"Alba is excited to enter into this sector and to offer AIM shareholders and investors access to a graphite project. Future demand for graphite looks firm due to its long-standing industrial uses, including its role as a key component in lithium-ion batteries," he added.
Alba's Executive Chairman George Frangeskides is also non-executive chairman of Artemis.
Shares in Alba were untraded on Tuesday, last quoted at 0.345 pence.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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