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Great Lakes Graphite Inc. (TSXV:GLK) announced that it’s signed a letter of intent (LOI) with Benton Capital Corp. under which Benton will gain the right to acquire a 10-percent gross overriding royalty interest on the sale of micronized flake graphite — or any other material — processed or micronized by Great Lakes’ Innovations division.
Great Lakes Graphite Inc. (TSXV:GLK) announced that it’s signed a letter of intent (LOI) with Benton Capital Corp. under which Benton will gain the right to acquire a 10-percent gross overriding royalty interest on the sale of micronized flake graphite — or any other material — processed or micronized by Great Lakes’ Innovations division.
The Innovations division is located at the company’s micronization facility in Ontario.
As quoted in the press release:
Subject to regulatory approval, due diligence and execution of a Definitive Agreement, Benton has the right to acquire up to a 10% Gross Overriding Royalty by providing GLI with $800,000 in three tranches as follows:
- To earn 5% GOR, Benton will make an initial payment of $400,000 on execution of the Definitive Agreement;
- To earn 7.5% GOR, Benton will make an additional payment of $200,000 on or before September 15, 2015;
- To earn 10% GRO, Benton will make an additional payment of $200,000 on or before October 15, 2015.
The 10% GOR applies to the first 30,000 tonnes of micronized material sold or such greater number of tonnes until a minimum of $10 million has been paid to Benton. The GOR is then reduced to $50/tonne for the duration of the Facilities Use Agreement (“FUA”), between GLI and Northfil Resources Limited. Upon expiry of the facilities use agreement, Benton will have the right of first refusal to continue to receive the GOR of $50/tonne (plus an indexed 5% increase annually) by paying 30% of the additional facilities use agreement cost, or should GLI acquire a new facility at that time, Benton will have the right to receive a 10% GOR on product produced from the new facility if Benton pays 30% of the acquisition cost of the new facility.
Paul Gorman, CEO of Great Lakes, commented:
To have a financing partner like Benton who understands and shares the value process of what we are building in Matheson is advantageous for both companies.
Click here to read the full Great Lakes Graphite Inc. (TSXV:GLK) press release.