Forum Energy Metals Corp. (TSXV: FMC | OTCQB: FDCFF) has announced the revision and completion of its acquisition of Rio Tinto Exploration Canada Inc.’s interest in the Janice Lake copper project in northern Saskatchewan, Canada giving Forum a 100% interest in the project.
“This agreement allows Forum shareholders an optionality play in copper where Rio Tinto added significant value to the project,” commented Forum CEO and president Rick Mazur.
“Forum has reviewed the data and has determined that copper deposits remain open for extension and numerous copper showings on the 52km extent of the property remain to be drilled. The key claims on the property are in good standing for 4-19 years while copper emerges as a fundamental commodity to achieve the energy transition.”
As consideration, Forum is to grant Rio a 20% back-in right in Janice Lake and a 2% net smelter royalty (NSR) capped at C$50M. The back in right can only be exercised by paying Forum an amount equal to all the expenditures incurred by Forum on the project from now up to the trigger date. On exercise, Forum and Rio will form an 80/20 joint venture for further development of the project.
Forum is also to pay Rio Tinto C$500K upon the earlier of completion of a preliminary economic assessment (PEA), a feasibility study, and commencement of commercial production. A further C$2Mwill also be due upon the earlier of completion of a feasibility study or commencement of commercial production if a feasibility study is not completed prior to the commencement of commercial production.
Forum’s obligations with respect to these milestone payments are secured by a debenture in favour of Rio Tinto granting a first charge over all the assets comprising the interest acquired from Rio.
For further information, please visit: www.forumenergymetals.com
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