Grid Metals has signed a definitive option and joint venture (JV) agreement with Teck Resources aimed at developing the Makwa nickel project in south-eastern Manitoba, Canada.
This agreement provides Teck with the option to acquire up to a 70% interest in the project.
It grants Teck a two-stage option to acquire up to a 70% interest in Makwa by funding a total of C$15.7m ($11.04m) in expenditures and making staged cash payments of C$1.6m to Grid Metals.
Of these payments, C$1m can be fulfilled through a share subscription at Teck’s discretion.
Teck’s initial obligation under the agreement is a C$400,000 cash payment.
Following additional geophysical surveying, Teck will be required to fund a minimum of C$450,000 in further expenditures. The agreement is subject to approval by the TSX Venture Exchange.
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The initial phase includes a C$600,000 cash payment and C$5.7m in exploration expenditures over four years.
Upon fulfilling these requirements, Teck would hold a 51% interest, with Grid Metals retaining 49%.
Should Teck exercise the first option, it can then opt to acquire an additional 19% stake by spending a further C$10m on exploration over three years and making a C$1m cash payment or, alternatively, subscribing to Grid shares at a premium.
The formation of a JV between Grid Metals and Teck is contingent upon Teck exercising the first option.
Teck Exploration vice-president Stuart McCracken said: “We are excited to announce this agreement with Grid, providing a framework to explore for magmatic Ni-Cu-PGE [nickel-copper-platinum group metals] systems in a prospective and readily accessible area.
“Bringing together resources and expertise from both Grid and Teck will support an agile, efficient and focused discovery programme.”
Situated 145km from Winnipeg, the Makwa nickel project is part of the mineral-rich Bird River Greenstone Belt.
Meanwhile, Grid will continue to fully own and explore the Mayville Cu-Ni property, located 30km north of Makwa.
Grid president and CEO Robin Dunbar said: “We are pleased to announce a definitive agreement with Teck, a leading Canadian resource company focused on responsibly providing the metals essential to economic development and the energy transition.
“Teck’s significant technical and operational know-how will be of immediate benefit to the Makwa nickel project.
“Having Teck involved in the project will provide financial support and added technical expertise to give our shareholders the maximum opportunity to participate in a Tier 1 nickel discovery.”
