Mining firm Cornish Metals has agreed a multimillion-pound deal to sell off a business in Canada. The AIM-listed firm has entered into a binding letter of intent with Northera Resources for the sale of the Nickel King and Opescal Lake properties for C$8m (£4.6m).
Nickel King Property is located in Canada's Northwest Territories, 135 km north-east of Stony Rapids, Saskatchewan.
Canadian-headquartered Cornish Metals, which is working to revive the South Crofty mine in Cornwall, said the deal would allow it to concentrate efforts on its º£½ÇÊÓƵ tin mining project. South Crofty was closed in 1998, following more than 400 years of continuous production, and was acquired by the company in 2016.
Ken Armstrong, interim chief executive and director of Cornish Metals, stated: “The sale of Nickel King aligns with Cornish Metals’ objective to focus its efforts on advancing its 100% owned and fully permitted South Crofty tin project, in the º£½ÇÊÓƵ, towards a construction decision.
"Cornish Metals will retain exposure to any future exploration success at Nickel King, as Northera works to recommence exploration activities at the Nickel King Property which comprises approximately 4,000 hectares in mining leases and mineral claims in Canada’s Northwest Territories.â€
Northera will pay Cornish Metals a non-refundable cash payment of C$100,000 within five days of signing the agreement. Within 95 days, Cornish Metals will transfer to Northera the legal and beneficial title to the mining leases and mineral claims comprising the Nickel King Property and Northera will pay the company a non-refundable cash payment of C$900,000.
On completion of the transaction by Northera, which will result in a listing of securities on the TSX Venture Exchange (or other stock exchange), the Canadian company will issue Cornish Metals shares in its capital to the aggregate market value equal to C$7m
Cornish Metals, which issued a statement last month on the movement of its share price, will own up to a maximum of 19.99% of the issued and outstanding common shares in the capital of Northera, it said.
