Lithium One Metals signs option assignment agreement
Lithium One Metals Inc. [TSXV-LONE; FSE-H490] has entered into an assignment agreement dated May 30, 2024, with Xplore Resources Corp. [TSXV-XPLR], Bounty Gold Corp. and Last Resort Resources Ltd. (Last Resort and, together with Bounty, the optionors), whereby the company has agreed to assign and transfer to Xplore all of its rights, titles, benefits and interest in, to and under an option agreement dated December 20, 2022, between the company and the optionors.
Pursuant to the option agreement, the optionors granted to Lithium One the exclusive right and option to acquire 100% of the rights, title and interest of the optionors in and to certain mineral claims located in Ontario, Canada, subject to a net smelter returns royalty of 2% to the optionors (payable on commencement of commercial production).
To exercise the option, Xplore will need to: Within seven calendar days of the receipt of the acceptance of the TSX Venture Exchange for the assignment agreement, issue to the optionors an aggregate of 260,000 common shares of Xplore and pay to the optionors an aggregate of $29,000 (of which, $19,000 has already been paid).
On or prior to January 11, 2025, Xplore will issue an additional 530,000 Xplore shares and pay an additional $38,500 in cash to the optionors.
Subject to the acceptance of the TSX-V, Xplore will pay an assignment fee of $200,000 to Lithium One in cash pursuant to the assignment agreement.
In connection with the assignment agreement, Lithium One, the optionors and Xplore have also entered into a royalty assignment agreement, pursuant to which Xplore has agreed, subject to TSX-V acceptance, to assume the obligation to grant a 2% net smelter returns royalty (NSR) from activities carried out on the optioned property to the optionors. Xplore may, upon payment to the optionors of $1 million, reduce the royalty payable under the NSR to a 1% net smelter returns royalty.
Joseph Meagher, chief financial officer of lithium One, is also the chief financial officer of Xplore. Other than Mr. Meagher, Xplore and Lithium One do not have any common directors or officers. Lithium One is an arm’s-length party in relation to each of the optionors.
Lithium One Metals is a Canadian exploration company specializing in the acquisition and development of high-potential lithium properties in Ontario and Quebec.