Kal Minerals signs LOI to acquire Vanadium North
2018-11-29 17:29 ET - News Release
Mr. Raymond Wladichuk reports
KAL MINERALS ENTERS INTO LETTER OF INTENT TO ACQUIRE VANADIUM NORTH PROPERTY
Kal Minerals Corp. has entered into a letter of intent (LOI) dated Nov. 28, 2018, with Vanadium North Resources Inc., pursuant to which the company has agreed to acquire all of the issued and outstanding common shares of Vanadium North.
Vanadium North is a privately owned Canadian mining company which holds an option to acquire 100 per cent of the mining claims comprising a vanadium property located in the Northwest Territories, Canada, from Strategic Metals Ltd. Upon completion of the acquisition: (a) Kal will own 100 per cent of Vanadium North in consideration for the issuance to Vanadium North shareholders of an aggregate of 13 million common shares of the company; and (b) Kal will issue that number of its common shares to Strategic Metals such that it will own approximately 19.9 per cent of Kal's issued and outstanding common shares postacquisition and postfinancing (defined below) until such time as an aggregate of $2-million has been raised. The common shares of the company to be issued to the shareholders of Vanadium North as consideration for the acquisition as well as the common shares of the company to be issued to Strategic Metals will be subject to a four-month hold period.
Vanadium North property
The Valley of Vanadium project is a major sediment-hosted vanadium prospect that has not seen focused exploration since 1985. The project encompasses 19 road-accessible mineral claims (96 square kilometres) that are located in southwestern Northwest Territories. It is immediately northwest of the former Cantung mine.
Vanadium mineralization is principally developed in a moderately to steeply dipping, sooty black, carbonaceous, siliceous mudstone unit. Historical geological mapping done in conjunction with chip sampling and diamond drilling indicates that this unit is at least 50 metres thick and extends over a considerable strike length. Two lines of continuous chip samples collected 600 metres apart across the prospective horizon returned weighted averages of 0.58 per cent and 0.61 per cent V2O5 (vanadium pentoxide) over true widths of 56.1 metres and 60.2 metres, respectively. A diamond drill hole completed between the chip sample lines yielded a weighted average of 0.42 per cent V2O5 over 52.5 metres, within a broader zone averaging 0.3 per cent V2O5 over 110 metres. Bedrock exposure is very limited on the property and the length of the mineralized zone is probably much greater than 600 metres since this type of deposit tends to have a high aspect ratio (depositional area versus thickness).
Strategic Metals will retain a 2-per-cent net smelter return royalty on any commercial production from the property, one-half of which may be purchased for a payment of $1-million at any time prior to the commencement of commercial production.
Technical information in this news release has been approved by Galen McNamara, PGeo, president and chief executive officer of Vanadium North and a qualified person for the purpose of National Instrument 43-101. All technical results were obtained from work completed historically on the Vanadium North property.
Kal also intends to complete a private placement financing to raise up to $2-million through the issuance of up to eight million common shares of the company at a price of 25 cents per share. The pricing of the financing was determined in the context of the market. The common shares of the company to be issued pursuant to the financing will be subject to a four-month hold period. Strategic Metals will continue to own 19.9 per cent of Kal's issued and outstanding common shares upon completion of the financing.
The net proceeds from the financing are expected to be used to finance exploration activities at the company's properties and for working capital purposes.
The parties to the acquisition are at arm's-length. Completion of the acquisition and the financing are not contingent on one another, however, they are both subject to a number of conditions, including the entering into of definitive agreements, the receipt of all required regulatory and third party consents, including the approval of the Canadian Securities Exchange, and the satisfaction of other customary closing conditions. Neither the acquisition nor the financing can be completed until the required approvals are obtained. There can be no assurance that the acquisition or the financing will be completed as proposed or at all.
About Kal Minerals Corp.
Kal is a Canadian junior mineral exploration company with a focus on properties in the New Westminster mining division of British Columbia, Canada. The company's sole property, the Jack White property, comprises four mineral tenures covering approximately 2,202 hectares approximately 13 kilometres northeast of Boston Bar, B.C.
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