Zenyatta Ventures (TSXV:ZEN) announced that it has reached an agreement with Cliff’s Natural Resources (NYSE:CLF) affiliate, Cliffs Natural Resources Exploration Canada Inc., to acquire a 100 percent ownership of the Albany graphite deposit.
As quoted in the press release:
Zenyatta has recently exercised its right and acquired an 80% interest in a claim block (4F) by having spent $10 million on exploration over the last 2 years at the Albany project. The Company has now acquired Cliffs’ remaining 20% interest (total of 100%) in the claim block referred to as 4F, which holds the Albany graphite deposit (“Block 4F Claims”). Pursuant to the terms of the transaction, Zenyatta and Cliffs agree to the following with respect to the Block 4F Claims:
a) Zenyatta will issue to Cliffs (or its designated affiliate) a total of 1,250,000 shares as follows: (i) 500,000 shares upon signing the agreement; (ii) 250,000 shares to be issued upon completion of a pre-feasibility study; and (iii) 500,000 shares to be issued upon completion of a feasibility study; and
b) Zenyatta will grant Cliffs a net smelter return royalty of 0.75% on the Block 4F Claims, of which 0.5% can be purchased at any time for $500,000.
Aubrey Eveleigh, Zenyatta’s President and CEO stated:
This transaction is of strategic importance to our Company. We now own 100% of the Albany graphite deposit and, more importantly, have eliminated the back-in right that Cliffs held under the original agreement. This allows Zenyatta the liberty of negotiating with another party, especially an end user of graphite, at any time along the development path of our graphite deposit.