Defense acquires 100% of Wicheeda rare earths project, British Columbia

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Defense Metals Corp. [DEFN-TSXV; DFMTF-OTCQB; 35D-FSE] has completed the acquisition of Spectrum Mining Corp., the holder of a 100% interest in the Wicheeda rare earth element (REE) property located 80 km northeast of Prince George, central British Columbia.

Pursuant to the option agreement between the company and Spectrum dated November 22, 2018, Defense Metals fulfilled all required cash payments, share issuances and exploration expenditure requirements necessary to exercise the option to acquire all of the issued and outstanding common shares of Spectrum. Upon delivery of the notice to Spectrum of exercise of the option, Defense Metals completed the final acquisition payments under the option agreement as follows: Defense issued to the shareholders of Spectrum on a pro rata basis, such number of common shares of the company equal to 49% of the issued and outstanding common shares on a post-issuance basis and paid to the vendors on a pro rata basis a cash payment in the aggregate of $100,000.

The final payments under the option agreement to acquire Spectrum totalled 78,115,549 common shares of Defense Metals at a deemed price of 22.5 cents per share and the payment of $100,000 in cash, for final payment consideration of $17,675,999. Defense also issued 1,171,733 common shares as a finder’s fee.

Craig Taylor, CEO of Defense Metals, commented: “Since entering the option to acquire the exploration-stage Wicheeda REE project in late 2018, Defense Metals has advanced the project through metallurgical flowsheet development, and initial and updated mineral resource estimates. This work has culminated in our recent positive PEA for Wicheeda yielding a pretax net present value of $760-million. Defense Metals now owns and controls 100% of the Wicheeda REE project. With this acquisition and our PEA, we look forward to continuing to advance this exceptional North American REE asset.”

The Wicheeda property is subject to a 2% net smelter return royalty payable upon the commencement of any commercial production. Defense Metals can purchase one-half of the NSR royalty from the vendors, on a basis pro rata to their prior shareholdings in Spectrum (being 1% of net smelter returns) for $1-million, leaving the vendors with an aggregate 1% NSR royalty.

The 2,008-hectare Wicheeda REE property is readily accessible by all-weather gravel roads and is near infrastructure, including power transmission lines, the CN railway and major highways.


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