Boliden, Grid Metals sign C$10M earn-in agreement for Thompson East project

Grid Metals has executed a definitive option and joint venture agreement with Boliden (BDNNY) Mineral Canada to explore and develop the Thompson East copper/nickel project in northern Manitoba, Canada. The Thompson East project sits ~15 km east of the eastern edge of the world-class Thompson Nickel Belt. The focus of the Agreement will be the discovery of a Tier 1 magmatic copper-nickel-PGM-cobalt deposit at Thompson East. The Agreement grants Boliden an option to acquire an 80% interest in Thompson East by funding cumulative expenditures of at least C$9,600,000 and making staged cash payments of C$500,000 to Grid. The Agreement is subject to the approval of the TSX Venture Exchange. Pursuant to the Agreement, Boliden has the option to acquire an 80% interest in the Thompson East copper/nickel property which consists of two existing mineral exploration licences totalling 10,600 hectares and several new adjacent MELs under application totalling an additional 46,500 hectares. Boliden may exercise the Option in the existing two exploration licences by making an aggregate of C$500,000 in cash payments and incurring an aggregate of C$9,600,000 in exploration expenditures over four years. Grid will be the initial manager of the exploration activities and utilize its exploration team as required to undertake the initial programs. A technical committee will be utilized to plan, oversee, and complete the exploration programs. Provided that Boliden exercises the Option, a contractual joint venture will be formed between Grid and Boliden. Thereafter, each Party would fund its pro-rata share of future expenditures on the Property or incur dilution. The Agreement contains other standard terms for an option and joint venture agreement including terms regarding replacement of the operator, sale of a participant interest and the right of first refusal of the other party, a funding deferral for Grid after the Option has been exercised, and dilution clauses. During the joint venture period, the party with the majority interest has the right to become or designate the operator, and if Boliden arranges project financing for the project, it has the right to purchase a share of Grid’s offtake proportional to the percentage of project financing that is being funded. If a party’s interest in the Property is diluted below 10%, its interest would be converted to a 1.0% Net Smelter Return royalty on the Property, of which 0.5% could be bought back by the royalty payor at any time following the fifth anniversary of commercial production for a cash payment of C$1,000,000.