The sale is a way for this company to realize
value from a noncore asset.
Lion One
Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX) announced in a news release it agreed to sell its interests in the Olary
Creek magnetite project in south Australia.
The divestiture includes a 51% tenement interest, a 47% interest in iron
ore and manganese rights and a 100% interest in other commodities.
In exchange, the acquirer will pay Lion One 10% of all funds its raises
until it has raised financing specifically for a bankable feasibility study.
It will also pay Lion One $7 million in tranches as certain milestones are
met.
Lion One will retain a free on board (FOB) royalty of 1% plus AU$0.75 per
ton sold, or a 2% FOB royalty, on all iron ore or manganese concentrates
extracted and sold from Olary Creek. "This agreement has the potential
to deliver considerable future income to the company through this royalty
stream," the release noted.
The purchaser is Lodestone Equities Ltd. and its subsidiary Olary
Magnetite Pty Ltd., owned by Australian mining entrepreneur Gordon Toll.
Lion One informed its current Olary Creek joint venture partner, Yukuang,
of its agreement to sell its interest in the project. Yukuang has 45 days to
say if it will exercise its pre-emptive right.
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