Mr. Frederic Leigh reports
ESV RESOURCES SIGNS LETTER OF INTENT FOR ACQUISITION OF INTEREST IN THE LOMERO-POYATOS PROJECT
ESV Resources Ltd. has entered into a binding letter agreement dated effective Nov. 12, 2020, with Qvartz Capital Partners Inc., which outlines the general terms and conditions by which the company may acquire a 66.67-per-cent interest in the Lomero-Poyatos project.
The Lomero-Poyatos project
The Lomero-Poyatos project comprises 13 mining concessions over an area of approximately 175 hectares located in Huelva province, Andalucia, southern Spain, within the Cerro Andevalo and Cortegana municipalities, about 500 kilometres south of Madrid, 85 km northwest of Seville and 60 km northeast of the Port of Huelva.
Terms of the transaction
Under the terms of the transaction, it is contemplated that the company will acquire 100 per cent of the issued and outstanding share capital of Viaggo Consultores SA, a wholly owned subsidiary of Qvartz, which will control 66.67 per cent of the issued and outstanding shares of Corporacion de Recursos Iberia SA (CRI), which, in turn, owns the mining rights to the Lomero-Poyatos project. In exchange for the Viaggo shares, the company will: (i) issue 35 million common shares of the company to Qvartz, where such common shares will be subject to a 12-month lock-up period; and (ii) grant a 2-per-cent net smelter return royalty to Qvartz on the production of minerals attributable to the 66.67-per-cent interest in the Lomero-Poyatos project. Additionally, the company will assume the obligations of Viaggo related to CRI, which include: (i) paying up to 6.5 million euros to CRI to satisfy CRI's current liabilities; and (ii) financing exploration work on the Lomero-Poyatos project through to the completion of a feasibility study on the project.
The closing of the transaction is subject to a number of conditions, including: the satisfactory completion of due diligence; the negotiation of and entering into a definitive agreement; the receipt of all required shareholder, regulatory and third party consents, including the approval of the TSX Venture Exchange; the completion of financing on terms acceptable to the company; and the satisfaction of other customary closing conditions. The transaction cannot close until the aforementioned conditions are satisfied and required approvals are obtained. There can be no assurance that the transaction will be completed as proposed, at all or concurrently with the company's previously announced reverse takeover transaction and change of business.
The completion of the transaction is subject to a number of conditions, including, but not limited to: the completion of satisfactory due diligence, exchange acceptance and shareholder approval, if applicable. The transaction cannot be completed until such conditions are satisfied and approvals are obtained. There can be no assurance that the transaction will be completed as proposed or at all.
We seek Safe Harbor.
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