Eureka Metals (ERKA.CN) on Thursday said it entered into a definitive option agreement with Go Metals (GOCO.CN) for the exclusive right to earn up to an 80% interest in the KM98 Titanium project, 45-kilometers southwest of the company's Tyee Titanium project in Quebec.
The company expects to start its inaugural exploration program at KM98 later this summer. Existing permits are in place for trenching and diamond drilling, it said.
Eureka must make cash payments of C$80,000, issue 1.5-million shares and incur C$2 million in exploration expenses at the project over three years, including a minimum of 2,000 meters of diamond drilling to earn an initial 50% interest. After completing the initial earn-in, Eureka may earn an additional 30% interest by making cash payments of C$100,000, paying an additional 2-million shares and incurring an additional C$2.5 million in exploration expenses over the subsequent two-year period, it added.
The companies intend to form a joint venture upon completion of the earn-in, with Eureka serving as the operator during the earn-in period and thereafter, unless otherwise agreed by the parties. Go Metals' participating interest will be carried by Eureka through completion of a pre-feasibility study, after which each party will contribute to future expenses in proportion to its participating interest or be subject to dilution in accordance with the terms of the joint venture agreement, the company said.
Shares of Eureka Metals were last seen down 4.3% at C$0.335 on the Canadian Securities Exchange.
Price: $0.34, Change: $-0.02, Percent Change: -4.29%