Green Shift Commodities agrees to sell Los Altares for C$1M and a royalty
Myriad would issue 1,571,268 shares, while Green Shift would retain a 2 per cent royalty with a partial buyback right.
Ines Halvorsen
A Nov. 13 closing is targeted for the sale of roughly 55,000 hectares in Argentina under an Oct. 9 agreement announced Tuesday by Green Shift Commodities Ltd. CVEGCOM OTCMKTSGRCMF. The seller would receive C$300,000 in cash and C$700,000 in shares, plus a royalty. The buyer, Myriad Uranium Corp. CNSXM OTCMKTSMYRUF FRAC3Q, would issue 1,571,268 common shares to acquire Buenavida Metales S.A., the Green Shift subsidiary holding Los Altares in central Chubut.
Green Shift is a mineral explorer whose assets include the Armstrong lithium property in northern Ontario and equity interests in uranium and lithium companies. The Oct. 13 announcement values the consideration shares at C$0.4455 each, based on Myriad's volume-weighted average trading price over the 10 trading days before the agreement's effective date. Green Shift would retain a 2 per cent net smelter returns royalty on minerals extracted from Los Altares.
Green Shift's Toronto shares CVEGCOM were C$0.070 as of 4 p.m. EDT on Oct. 9 on Google Finance. That quote predates Tuesday's announcement.
"The combination of cash, Myriad shares and a royalty allows us to monetize Los Altares and maintain exposure to its future success," Green Shift chief executive Trumbull Fisher said in the release.
Closing Remains Conditional
Green Shift's Oct. 13 release says closing is subject to TSX Venture Exchange and Canadian Securities Exchange approvals, if required, and customary closing conditions. The cash payment, share issuance and royalty grant are tied to completion.
Buenavida would have the right to buy back half the royalty for C$1 million under the Oct. 13 terms. Exercising that right would reduce Green Shift's retained royalty to 1 per cent from 2 per cent.
Green Shift would receive its royalty under a separate agreement to be signed at closing. The consideration shares would be subject to securities laws and Canadian Securities Exchange policies, including applicable resale restrictions.
The cash portion is fixed in Canadian dollars, while the value of Green Shift's retained equity would move with Myriad's shares. Royalty income depends on production, and Green Shift cautions that Los Altares may never produce or generate royalty payments.
Myriad's Oct. 13 release describes Los Altares as 23 mining properties. The buyer says it will compile existing exploration data to develop an exploration plan. Its release does not provide a start date for that work.
Myriad says its qualified person has not verified the historical drilling totals, locations, procedures, analytical methods or results. It cautions that the historical information should not be relied upon as demonstrating mineralization on Los Altares.
The buyer has also not established whether any mineralization discovered would be suitable for in situ recovery. Its release says no hydrogeological, permeability or metallurgical work has been completed to determine suitability.
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The next scheduled milestone is the expected closing on or before Nov. 13, when the parties plan to exchange the cash and shares and sign the royalty agreement.
