Neotech Metals (NTMC.C) has signed an agreement with Kenorland Minerals (KLD.V) allowing it to acquire a 100% interest in the Torrance project in Ontario. Torrance is located just 70 kilometers from Neotech’s flagship project (Hecla-kilmer) where it recently encountered in excess of 400 meters of 0.53% TREO and 214 meters of 0.67% TREO.
The Torrance project is a niobium-tantalum-REE project and as Kenorland has done quite a bit of ground work (including completing almost 2,900 line kilometers of high-resolution aeromagnetic gradiometery, it was time for another company to take the baton and continue to work on the high-priority targets on the land package.
Neotech will issue 1 million shares to Kenorland (subject to a two year holding period) and is required to complete at least 2,000 meters of diamond drilling on the project before the third anniversary of the agreement. A cheap earn-in agreement for Neotech, which will only have to issue a 2% NSR to Kenorland (of which it can repurchase half for C$5M). Should drilling be successful, Kenorland should benefit from the Neotech share price. And if the project would ever become a mine, the NSR could be valuable. But Kenorland is just doing what it’s good at. Find good assets, do some groundwork and search for a joint venture partner (or earn-in agreement) to advance the exploration projects.
Disclosure: The author has no position in Neotech or Kenorland Minerals. This post is for educational purposes only; be mindful investing in junior mining stocks is risky and you may lose your entire investment if things go wrong. Please read the disclaimer.
