Strategic Metals Ltd. (TSX VENTURE:SMD) announces that pursuant to the terms of an August 1, 2012 royalty purchase agreement, Strategic will sell its royalty interests in three advanced mineral projects to 8248567 Canada Limited, an arm’s length purchaser, for up to US$36 million. The three royalty interests being sold are:
- a 5% net profits royalty interest in the Casino copper-molybdenum-gold deposit, located in the Whitehorse Mining District of the Yukon Territory and owned by Western Copper and Gold Corporation;
- a 1% net smelter return royalty interest in the Logtung tungsten project, located on the Yukon-British Columbia border and owned by Largo Resources Ltd.; and
- a 1% net smelter return royalty interest in all mineral production from the Kink 3 mineral claim that covers a substantial portion of the Wolverine zinc-silver-lead-copper-gold deposit, located in the Watson Lake Mining District of the Yukon Territory and owned by Yukon Zinc Corporation. The 1% royalty interest will be reduced to a 0.5% net smelter return royalty interest after a total of $500,000 in royalty payments have been made to the royalty holder.
The sale proceeds to be received by Strategic will consist of:
- an initial cash payment of US$30 million on the closing of the royalty sale; and
- an additional cash payment of US$6 million if the operator of the Casino project has obtained all necessary permits and authorizations prior to December 31 2016 to construct and operate the project as a producing mine as contemplated in a feasibility study prepared for and upon which the operator makes a positive construction decision…