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Highlights:
- Champion Electric Metals closes a binding option agreement, transferring 100% interest in the Baner Gold Project to Legacy Gold Mines.
- The deal includes immediate cash and stock payments totaling $75,000 and 1.1 million common shares.
- Legacy Gold is positioned to explore the promising gold prospects in Idaho with seasoned industry expertise.
Champion Electric Metals Inc. (CSE: LTHM) (OTCQB: CHELF) (FSE: 1QB0) has successfully completed its previously announced binding option agreement with Legacy Gold Mines Ltd. (formerly Prestwick Capital Corporation Limited) for the sale of its Baner Gold Project, located in Idaho County, Idaho, USA. This strategic transaction marks a significant step for Champion Electric as it refocuses its efforts while ensuring its shareholders benefit from the upcoming potential in gold exploration.
Under the terms of the agreement, Champion Electric will receive immediate compensation consisting of a cash payment of CAD $75,000, along with 1.1 million common shares of Legacy at a deemed price of $0.235 per share. Additionally, the agreement includes warrants to purchase up to 200,000 common shares at $0.30 per share, valid for two years from the date of issuance. This structure not only provides Champion Electric with an immediate influx of capital but also aligns its interests with the future success of Legacy Gold.
Jonathan Buick, President and CEO of Champion Electric, expressed optimism regarding the transition. "We look forward to seeing seasoned mining executive Brian Hinchcliffe, along with exploration and production geologist Mike Sutton, dive into Baner's prospective gold exploration zones," he remarked. Buick further emphasized the potential for a favorable gold market, wishing Legacy Gold great success as new shareholders.
The sale agreement includes further financial milestones. Within 18 months of closing, Champion Electric is set to receive an additional CAD $350,000, along with 200,000 common shares and warrants to purchase 200,000 common shares at the last closing price prior to issuance. Following this, within 12 months from the first payment date, the company will receive CAD $500,000 and similar warrants.
Legacy Gold will have the exclusive right to manage and operate all work programs conducted on the Baner Gold Project, allowing them to strategically develop the site with their expertise. They will also maintain the project in good standing throughout this period, ensuring that all regulatory and operational requirements are met.
Upon fulfilling the financial commitments outlined in the agreement, Legacy Gold will obtain a 100% undivided interest in the Baner Gold Project, free of encumbrances, subject to a 1% net smelter return royalty (NSR) payable to Champion Electric. Notably, Legacy has the option to buy back this NSR for a substantial payment of $7.5 million, showcasing the potential value of the project for both parties.
The Baner Gold Project has garnered attention for its promising gold exploration potential, and with Legacy Gold at the helm, it is poised for significant advancement. As the gold market continues to evolve, this partnership enables Champion Electric to focus on new opportunities while benefiting from its retained interest in the project’s future success.
