- InZinc Mining (IZN) has signed a letter of intent granting American West Metals an option to acquire the West Desert Project in Utah
- American West will pay an initial US$500,000 (roughly C$645,700) in cash, along with further staged payments over the next 24 months
- InZinc will also retain a 50 per cent net smelter royalty on indium mined from the project, half of which – or 25 per cent – may be purchased by American West for US$5 million (C$6.46 million)
- The proceeds will be used in part to advance InZinc’s Indy Sedex Project as well as other opportunities
- InZinc Mining is currently steady at 3.5 cents per share
InZinc Mining (IZN) has signed a letter of intent granting American West Metals an option to acquire the West Desert Project in Utah.
Located in the west of the state, roughly 160 kilometres southwest of Salt Lake City, the project hosts an inferred mineral resource of 46 million tonnes at 1.76 per cent zinc, 0.22 per cent copper and 24 grams per tonne of indium.
Under the terms of the agreement, American West will pay an initial US$500,000 (roughly C$645,700) in cash to InZinc upon signing a definitive deal.
American West will also be required to pay C$1 million within 30 days of its shares listing on the ASX, or after 12 months of signing, along with C$1.94 million upon announcing the completion of a pre-feasibility study.
In addition, InZinc will receive C$2.5 million in American West shares. However, should American West fail to list on the ASX within 12 months of signing the definitive deal, InZinc will receive C$1.25 million cash in lieu of the shares.
According to the initial deal, InZinc will also be granted a 50 per cent net smelter royalty on all indium mined from the West Desert Project. American West may purchase half of this royalty – or 25 per cent – for US$5 million (C$6.46 million) at any time prior to the first sale of indium from the project.
“The company anticipates that the proposed transaction will benefit InZinc by providing ongoing leverage to advancements at West Desert as well as the financial means to consider next steps at its prospective Indy Sedex project and other opportunities,” said Wayne Hubert, CEO of InZinc Mining.
The two companies have until March 31, 2021, to negotiate and execute a final agreement.
InZinc Mining is currently steady at 3.5 cents per share as of 2:15pm EST.