Mr. Eric Edwards reports
TRIMETALS MINING SIGNS LETTER OF INTENT TO SELL ITS 100% INTEREST IN THE ESCALONES COPPER PROJECT TO WEALTH MINERALS LTD. TO CREATE NEW CHILEAN COPPER FOCUSED COMPANY
Trimetals Mining Inc. has executed a letter of intent with Wealth Minerals Ltd. with respect to the divestiture of the company's 100-per-cent interest in the Escalones copper project in Chile to a newly formed, copper-focused, subsidiary of Wealth Minerals that Wealth Minerals is to spin out to its shareholders.
Eric Edwards, president and chief executive officer of Trimetals, commented: "We are very pleased to be partnering with Wealth Minerals to advance exploration on the large and prospective Escalones copper project. Wealth has a demonstrated history and experience in discovering and advancing exploration and development projects worldwide. Their technical and financing teams have repeatedly demonstrated their unique ability to identify projects at an early stage that have the potential to become major producing projects. We look forward to the next phases of discovery and value addition at Escalones under Wealth leadership."
In consideration for the sale of the Escalones copper project to Wealth Copper, Wealth Copper is to issue to Trimetals such number of common shares that represents 30 per cent of its issued and outstanding common shares and will pay to TMI a total of $1.0-million in cash in instalments of which $150,000 is to be paid now, and of which $350,000 is to be paid on the closing of the Wealth Copper private placement (as defined below), with the remaining $500,000 to be paid on the one-year anniversary of closing of the Wealth Copper private placement. In addition, a wholly owned Chilean subsidiary of Wealth Copper is to grant Trimetals a 2-per-cent net smelter returns royalty payable on production from the Escalones copper project concessions, if the copper price is greater than 75 U.S. cents per pound, and a 1-per-cent net smelter returns royalty if the copper price is equal to or less than 75 U.S. cents per pound, subject to a buyback right.
Under the terms of the LOI, Wealth Minerals will have a 45-day exclusivity period to complete its technical and legal due diligence on the Escalones copper project and the subsidiaries of the company that hold title to the Escalones copper project assets. Following successful completion of due diligence, Wealth Minerals will determine, at its sole discretion, whether Wealth Copper will acquire the Escalones copper project by way of the acquisition of all of the shares of the company's Chilean subsidiary, Trimetals Mining Chile SCM, or by way of an assignment and transfer of all rights, title, benefit and interest in the assets comprising the Escalones copper project and the assumption of all liabilities related to such assets.
Prior to or concurrently with completion of the spinout, Wealth Copper is to raise at least $5.0-million in financing and Trimetals is to hold 30 per cent of the shares of Wealth Copper postfinancing and will also be entitled to nominate one representative to Wealth Copper's board for so long as it holds at least 20 per cent of the issued and outstanding shares of Wealth Copper. Trimetals will also have a right to participate in future equity financings of Wealth Copper for up to two years postclosing to allow it to maintain its pro rata interest in Wealth Copper.
Trimetals' sale of the Escalones copper project is subject to the parties negotiating and executing a definitive agreement no later than Feb. 28, 2019, and is also subject to board and regulatory approval.
About Escalones copper
The Escalones copper project is strategically located in the Chilean Central Andes in the same belt as Codelco's El Teniente (approximately 35 kilometres distance) and Anglo's Los Bronces (approximately 110 km distance) mines. The Escalones copper project has a total property package of 16,189 hectares.
About Trimetals Mining Inc.
Trimetals Mining is a growth-focused mineral exploration company creating value through the exploration and development of the near-surface Gold Springs gold-silver project in mining-friendly Nevada and Utah.
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