Londo Nickel has signed an option agreement to acquire 100% of the Flåt and Bamble nickel-copper sulphide projects in Norway from EMX Royalty.
Londo Nickel is also planning to proceed with the Australian Securities Exchange (ASX) initial public offering (IPO) later this year.
As per the deal, Londo Nickel will make a $30,000 (A$44,266) cash payment. The company can make an additional $20,000 payment to EMX to earn 100% interest in the EMX subsidiary company that owns the two projects, during a seven-month option period.
Londo Nickel, once the IPO and ASX-listing process begins, will make an additional cash payment of up to $100,000 and issue 750,000 Londo Nickel shares to EMX, and 1,000,000 options.
Upon the IPO first anniversary, Londo Nickel will make a cash payment of $50,000 to EMX.
EMX, however, will retain 2.5% net smelter return royalty interests in each of the two projects. It will also receive annual advance royalty payments on each of the two projects from the third anniversary of the IPO.
Furthermore, EMX will receive $250,000 in milestone payments upon announcement of a maiden joint ore reserves committee resource for each of the projects.
Londo will also make additional milestone cash payments of $500,000 to EMX upon the delivery of a feasibility study for each project.
Londo Nickel executive chair David Sumich said: “The projects will provide Londo with an outstanding pair of battery metal assets as the basis for our proposed ASX listing scheduled for next quarter.
“Importantly, this Agreement preserves the integrity of the current capital structure, paving the way for potential post listing leverage. The Madagascan nickel assets under the binding SPA are now proposed to be transferred to Londo post IPO trading.”
Additionally, Londo Nickel will invest at least $300,000 and $100,000 in the Flåt and Bamble projects, respectively, by the first anniversary of the IPO, and $300,000 annually starting on the second anniversary of the IPO.
EMX Royalty said the projects will provide a strong pair of battery metal assets to Londo Nickel, prior to its proposed ASX listing.
The two companies plan to implement modern exploration methods and deposit models to advance the two projects.
