Brixton Metals and High Power Exploration Sign Heads of Agreement for an Earn-In, Joint Venture of up to USD$44.5 Million to explore and develop the Hog Heaven Project - Seite 2
Stage 1 Cash Payments: A cash payment of $500,000 will be paid by HPX on signing a definitive earn-in agreement, and further cash payments of $500,000 are due in
each of the following four years, and payments of $1 million are due in each of the fifth and six years (for a total of $4.5 million in cash payments);
Stage 1 Earn-In: HPX shall fund aggregate expenditures of $15 million ("Stage 1 Earn-In Expenditures") to earn a 51% interest in Brixton USA Corporation (the
“Joint Venture Company“), with no less than $3 million of the Stage 1 Earn-In Expenditures being incurred by the second anniversary date of the Heads of Agreement;
Stage 2 Earn-In: HPX has the right to increase its interest in the Joint Venture Company to 75% by funding an additional $25 million in expenditures ("Stage 2 Earn-In
Expenditures"), as follows: by incurring minimum expenditures of $10 million by the ninth anniversary date and incurring an additional $15 million in expenditures before the eleventh
Operator: HPX shall control and direct all exploration, development and other related activities during the earn-in periods at the Hog Heaven Project; and
Private Placement and Royalty Purchase: Concurrent with entering into the Heads of Agreement, Mr. Robert Friedland has agreed to invest CAD$2 million into the Company. Such funds
will be used to purchase for cancellation of 1.5% of the existing 3.0% net smelter returns royalty on the Hog Heaven Project (the “Existing Hog Heaven NSR“) held by Pan American
Silver Corp. (“Pan American”).
From the date the Stage 2 Earn-In is complete until the date that the Joint Venture Company makes a decision to commence the development and construction of an operating mine at the Hog Heaven Project, each of Brixton and HPX shall fund the activities and operations of the Joint Venture Company pro rata as to their percentage interest in the Joint Venture Company, except that, if requested by Brixton, HPX shall fund Brixton's pro rata portion of the costs of the activities and operations of the Joint Venture Company but Brixton's pro rata portion of the costs shall accrue in a notional account with interest calculated at the annual rate equal to the US Federal Reserve Secured Overnight Financing Rate + 7% ("Brixton Deferred and Accrued Costs"). At the date a construction decision is made, the Brixton Deferred and Accrued Costs shall become due and payable, and owing to HPX, and shall be paid within twelve (12) months of the date a construction decision is made, failing which Brixton shall be subject to dilution pursuant to a standard dilution calculation. If a party’s interest in the Joint Venture Company is diluted below ten (10%) percent, then the shares of the Joint Venture Company held by such party shall be cancelled and its shareholding interest converted into a 2.0% net smelter return royalty.
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