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Pacific Empire Minerals Corp
Symbol PEMC
Shares Issued 90,348,196
Close 2023-11-27 C$ 0.01
Market Cap C$ 903,482
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Teako Minerals cancels Pinnacle option agreement

2023-11-28 11:11 ET - News Release

See News Release (C-TMIN) Teako Minerals Corp

Mr. Sven Gollan of Teako reports

TEAKO MINERALS ANNOUNCES TERMINATION OF THE PINNACLE OPTION AGREEMENT TO ALLOW MAXIMUM FINANCIAL FLEXIBILITY AND PROJECT ADVANCEMENTS

Effective Nov. 27, 2023, Teako Minerals Corp. has provided Pacific Empire Minerals Corp. a notice of termination on the option agreement, dated Aug. 25, 2020, and as amended on Aug. 26, 2022. The Pinnacle option agreement granted Teako the right to acquire a 70-per-cent interest in the Pinnacle copper-gold property in British Columbia from Pacific Empire Minerals Corp.

Teako will leave the property in good standing. As a result of the termination of the agreement, Teako will also request reimbursement of the reclamation bond, paid by the company in relation to the drill permit on the property, for a total of $22,600.

Termination rationale

Following a full project review of all the jurisdictions, the company has deemed the terms of the Pinnacle option agreement too much of a financial liability for the company at the current stage to continue. In particular, the company considered the following factors:

  • High work commitments and costs: The project requires an additional investment totalling approximately $2,985,000 until August, 2026, between option payments and exploration commitments. The associated financial burden was deemed unsustainable, significantly surpassing the now-highest work commitment in the company's current project portfolio, which stands at $100,000.
  • A desire for full control: Teako aims to maintain maximum control over current and future project costs, allowing Teako to exercise maximum flexibility in its project portfolio across the various jurisdictions whilst enabling maximum exposure to other potential opportunities.
  • Portfolio flexibility: This decision aligns with Teako's strategic goal of ensuring maximum flexibility within its project portfolio, enabling advancements and developments across all target jurisdictions in line with Teako's long-term vision and objectives.
  • Timely action: Termination was a necessary step to maintain the project's good standing while adhering to the termination clauses outlined in the Pinnacle option agreement.
  • Bond return: As part of the termination process, Teako will be entitled to the return of the reclamation bond currently in place.
  • Equally favourable terms: Terminating the Pinnacle option agreement means that all the company's projects are now under similarly favourable terms. In British Columbia, all projects are 100 per cent owned without any work commitments and remain in good standing for the next 24 months. The company's projects in Scandinavia also operate under favourable terms.

The company appreciated the partnership with Pacific Empire Minerals and wishes it the best of luck in their future endeavours.

Terms of the terminated agreement

On Aug. 25, 2020, and as amended on Aug. 26, 2022, the company entered into an option agreement to earn a 70-per-cent interest in the Pinnacle copper-gold property from Pacific Empire Minerals. Under the terms of the agreement, the company could have earned a 70-per-cent interest in the property by making total cash payments to Pacific Empire Minerals of $460,000 ($110,000 paid to the date of this news release), issuing a total of 3.8 million common shares to Pacific Empire Minerals (800,000 common shares issued to the date of this news release) and incurring total exploration expenditures of $3-million (approximately $365,000 incurred to the date of this news release), collectively, staged over a period of four years through to August, 2026.

Following the earn-in, the company would have had to make a cash payment of $50,000 to Pacific Empire Minerals (or the equivalent number of common shares) within three years of the earn-in completion date and each subsequent anniversary of such date. Additionally, Pacific Empire Minerals would retain a 30-per-cent free carried interest in the property up until the date that the company publishes a National Instrument 43-101 compliant prefeasibility study (PFS) on the property. Following completion of a PFS, a joint venture would have been formed, whereby the company would own a 70-per-cent initial interest and Pacific Empire Minerals would own a 30-per-cent initial interest. Additionally, upon completion of the earn-in, Pacific Empire Minerals would have retained a 2.0-per-cent net smelter return royalty, which could be reduced to 1.0 per cent by making a $1-million cash payment to Pacific Empire Minerals.

About Teako Minerals Corp.:

Teako Minerals is a Vancouver-based mineral exploration company committed to acquiring, exploring and developing mineral properties in Canada, Norway and Finland exploring for gold, copper and cobalt. The adoption of technologies such as the SCS Exploration product aligns with its strategy to remain at the forefront of the rapidly evolving mining industry.

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