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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