Beaufield Resources Inc. (TSXV:BFD) announced that it will acquire Balmat Holding Corp., a subsidiary of Hudbay Minerals Inc. (TSX:HBM), through the signing of an exclusivity arrangement and a non-binding letter of intent with Hudbay. The acquisition will give Beaufield ownership of the Balmat zinc mine.
As quoted in the press release:
The LOI and Exclusivity Agreement give Beaufield 90 days to complete its confirmatory due diligence review, negotiate a definitive agreement, and close the Acquisition based on the terms provided for in the LOI.
The key terms of the LOI contemplate Beaufield acquiring Balmat for payments totalling C$12 million and up to C$2 million in initial equity of Beaufield, consisting of:
- An initial payment due upon closing of the Acquisition (the “Closing”) of C$4 million in cash;
- Equity consideration issued at Closing up to C$2 million in common shares of the Company’s capital (the “Shares”) priced at a 5% discount to the 10-day volume-weighted average price prior to the closing date, subject to a maximum of 12 million shares;
- A second cash payment due six months after Closing of C$4 million;
- A third cash payment due 12 months after Closing of C$4 million.
Investing in zinc? Zazu Metals Corporation (TSXV:ZAZ) holds a 50% interest in the Lik Project in Alaska, a joint venture with Teck Resources Limited. The PEA on Lik South estimates that 17.1Mt tonnes of ore milled at an average grade of 7.7% zinc, 2.6% lead and 47 g/t silver would come from the Lik South project.
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