Teck taking 35% stake in Valhalla Metals in Alaska asset deal
Valhalla Metals Inc. [VMXX-TSXV, VMXXF-OTCQB] said it has entered into a purchase and sale agreement with a subsidiary of Teck Resources Ltd. that will see Teck vending 100% of its Smucker copper-gold-silver-zinc project located in the Ambler Mining District in Alaska into a unit of Valhalla Metals.
By consolidating Teck’s Smucker Project with Valhalla’s nearby copper-gold-silver-zinc Sun Project, with Teck as the largest shareholder, the transaction provides a path to advance two deposits with the combined potential to contribute to the critical mass necessary to bolster the economic justification for the proposed Ambler Access Project.
With these assets, Valhalla said it expects to move beyond exploration to support the infrastructure requirements of a major critical metal district in the United States.
Under the terms of the agreement, Teck has pledged to convey its interest in the Smucker project to Valhalla for a consideration that includes: 44.8 million Valhalla shares, representing 35% of the issued and outstanding Valhalla shares, a priority purchase right and right of last offer to Teck on the purchase of any concentrate produced from the Sun and Smucker properties on customary commercial terms, and a 2.0% net smelter return royalty on certain parts of the project.
“This transaction is a transformative milestone for Valhalla, effectively providing the company with the scale to contribute meaningfully to the development of the Ambler Mining District,’’ said Valhalla Chairman Rick Van Nieuwenhuyse. “By combining these two projects, we see the potential to move quickly to materially support the economic use case for the proposed Ambler Access Project, which, we believe, is key to unlocking this prospective critical metals district,’’ he said.
The proposed Ambler Access Road is a proposed 300-kilometre industrial-use-only road from the Upper Kobuk Mineral Projects (UKMP) to the Dalton Hwy. It is planned to cross Valhalla State mining claims at the Sun project and would unlock a host of critical and strategic metals located in the Ambler Mining District, Valhalla has said.
“We are very pleased to welcome Teck as a key partner – Teck brings a long and successful operating history in Alaska, and we look forward to working together to develop these important projects towards providing new secure, domestic sources of critical minerals for the United States,’’ Van Nieuwenhuyse said.
Valhalla shares were unchanged at 63 cents and trade in a 52-week range of 99 cents and 15.5 cents.
The Smucker Project is a polymetallic volcanogenic massive sulphide (VMS) deposit located in the western end of the Ambler Mining District, 35 kilometres northwest of the Arctic Deposit, which is currently being advanced by South32 Australia Ltd. [S32-ASX, JSE, LSE, SOUHY-OTC) and Trilogy Metals Inc. [TMQ-TSX, NYSE] under the Ambler Metals Joint Venture.
The Sun deposit is one of the most advanced VMS deposits in the eastern part of the Ambler Mining District. It hosts a NI-43-101 compliant mineral resource of 1.71 million tonnes of grade 1.48% copper, 0.21 g/t gold, 60 g/t silver, 4.32$ zinc and 1.11% lead in the indicated category.
Resource World Magazine Inc. has prepared this editorial for general information purposes only and should not be considered a solicitation to buy or sell securities in the companies discussed herein. The information provided has been derived from sources believed to be reliable but cannot be guaranteed. This editorial does not take into account the readers investment criteria, investment expertise, financial condition, or financial goals of individual recipients and other concerns such as jurisdictional and/or legal restrictions that may exist for certain persons. Recipients should rely on their own due diligence and seek their own professional advice before investing.