Ardiden Limited (ASX: ADV) has entered into a Binding Agreement with Green Technology Metals Limited (ASX: GT1) for the sale of its remaining 20% interest in the Lithium Joint Venture over the Seymour Lake, Root Lake and Wisa Lake assets in northwest Ontario, Canada.
The Total Consideration is up to A$18.5 million, consisting of upfront cash consideration of A$16 million, and a deferred consideration component of A$2.5 million, payable upon reaching a JORC Mineral Resource of 20Mt at the Joint Venture tenements.
Ardiden continue to have exposure to GT1 and its lithium assets through its ownership of ~13.0m shares in GT1, representing 5.14% of the shares on issue. The GT1 shares held by Ardiden have a market value of A$10.8 million, as at close of business on 21 October 2022.
We are pleased with the Transaction, which will see Ardiden emerge as a well-capitalised entity with the funding required to aggressively explore our highly prospective Pickle Lake Gold Project,” Ardiden Chair, Bruce McFadzean, said.
“The Transaction is non-dilutive for existing Ardiden shareholders and recognises the value of our assets relative to our recent trading history. Ardiden will retain material exposure to GT1 via Ardiden’s ~13m shares in GT1 and the potential for the deferred consideration.”
The proceeds to be received by Ardiden are expected to be subject to Canadian withholding tax. A$8m of the upfront cash consideration is likely to be withheld, with Ardiden expecting the majority of these funds to be returned following filing of its tax return in Q1 CY23.
Ardiden intends to apply the net consideration proceeds towards gold exploration at its Pickle Lake Gold Project, a continuous “District-Scale” 1,088 sq. km (108,800 hectare) gold landholding, located east of Red Lake in the well-endowed Uchi Geological sub-province of north-western Ontario, Canada.
The Uchi Province is host to numerous currently producing gold mines at Red Lake and at Musselwhite, and is a highly active exploration area with Evolution, Newmont, Kinross, and numerous other exploration companies all currently active with gold exploration work in the area.
During the most recent quarter Ardiden focussed on compilation and interpretation of the assay results from 32 holes of the 43- hole drilling programme at its Pickle Lake Gold Project, where nearly 6,000 m of diamond drilling has been completed so far at the Western Hub.
A final drill results update is planned in the coming weeks as assays are received from the laboratory
The Binding Agreement contains provisions pertaining to pre-completion conduct, warranties and indemnities that are customary for a transaction of this nature.