11th Jul 2016 07:14
LONDON (Alliance News) - Landore Resources Ltd shares fell on Monday after it said it will sell the Root Lake lithium property in Canada to Ardiden Ltd in return for shares, cash and a smelter royalty.
Landore shares were down 7.3% to 1.90 pence per share on Monday morning.
Ardiden is an Australian mineral exploration company that held the right to acquire 100% of the project from Landore under a deal that signed in February of this year.
Ardiden has paid a CAD50,000 deposit to Landore and the deal is expected to be formally completed on July 26. On that date, Landore will secure CAD150,000 in cash and a further CAD150,000 through shares in Ardiden, issued at the 20-day volume weighted average price prior to the deal being unveiled on February 10.
Landore will also remain exposed to the project through a 3.0% net smelter royalty. However, Ardiden will also have the right to purchase half of the royalty for CAD1.0 million, meaning that the royalty would drop to 1.5%.
The cash consideration received by the company from the option agreement will be applied towards its working capital requirements, Landore said.
By Joshua Warner; [email protected]; @JoshAlliance
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