Mr. Wayne Hubert reports
INZINC SIGNS LETTER OF INTENT TO OPTION WEST DESERT PROJECT
Inzinc Mining Ltd. has signed a non-binding letter of intent with American West Metals Ltd., a private Australian company, outlining the principal terms and conditions of an option agreement that American West and Inzinc intend to enter into and under which American West may acquire Inzinc's West Desert project in Utah. The option agreement will be subject to, amongst other matters, TSX Venture Exchange approval.
"The company anticipates that the proposed transaction will benefit Inzinc by providing ongoing leverage to advancements at West Desert as well as the financial means to consider next steps at its prospective Indy Sedex project and other opportunities," said Wayne Hubert, chief executive officer of Inzinc Mining.
The principal terms of the LOI include:
- An initial cash payment of $500,000 (U.S.) to Inzinc upon signing of the option agreement.
- Required payments to Inzinc during the 24 months following the signing of the option agreement to comprise:
- $1-million within 30 days of American West listing its shares on the Australian Securities Exchange through an initial public offering or other process, or 12 months after signing of the option agreement, whichever is earlier;
- $1.5-million (U.S.) upon the announcement by American West to the ASX of a completed prefeasibility study for the West Desert project, or 24 months after signing of the option agreement, whichever is earlier; and
- $2.5-million by way of free trading shares of American West. If American West has not been admitted to the official list of the ASX within 12 months of signing of the option agreement, Inzinc may elect to receive $1.25-million in cash from American West in lieu of shares.
- Indium profit share: If American West exercises the option agreement and acquires the West Desert project, Inzinc will receive 50 per cent of the revenue from the sale of indium mined from the West Desert project determined on a net smelter return basis in accordance with generally accepted industry practice. American West will have the right to reduce the NSR to 25 per cent by paying Inzinc $5-million (U.S.) in cash at any time prior to the first sale of indium from the project.
- Reversion of project: If payments referred to herein are not paid when due and American West does not rectify the failure within 45 days, Inzinc would have the right to terminate the option agreement and the West Desert project will revert to Inzinc.
- Exclusivity period: From the date of the LOI until March 31, 2021, Inzinc agrees to negotiate exclusively with American West with the intention to finalize the terms and execute the option agreement as soon as possible.
About American West Metals Ltd.
American West is targeting to be listed on the ASX by April 30, 2021.
About Inzinc Mining Ltd.
Inzinc is focused on growth in zinc through exploration and expansion of the advanced-stage West Desert project (100 per cent) in Utah and exploration of the early stage Indy project (100-per-cent option) in British Columbia. West Desert has a large underground resource open for expansion and has district-scale exploration potential. A West Desert preliminary economic assessment completed in 2014 forecasted 1.6 billion pounds of zinc production over 15 years. Byproducts would include copper, magnetite and indium, the latter being identified by the United States in 2017 as a critical mineral. West Desert is well located with easy access and existing infrastructure. The Indy Sedex project comprises near-surface discoveries, large untested exploration targets and regional discovery potential. Indy is readily accessible by road from Prince George, the major hub for transportation and heavy industry in central British Columbia, and is located 85 kilometres south of the Canadian National Railway.
We seek Safe Harbor.
© 2021 Canjex Publishing Ltd. All rights reserved.