Teako Minerals has signed a definitive agreement to acquire a 90% stake in the Løkken copper-zinc-cobalt (Cu-Zn-Co) project in Trøndelag, Norway, from Capella Minerals.
The Løkken project will be integrated with Teako’s adjacent Lomunda claims, and together with the Venna projects, they will be collectively known as the Løkken & Venna Projects.
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This consolidation represents a significant step forward for Teako, providing access to advanced drill targets, including the drill-ready Åmot target, planned for winter 2024/2025.
Teako is obligated to issue 2.5 million common shares to Capella by 30 August 2024 and pay C$350,000 in cash.
Teako will also carry out a drill programme on the Åmot target within 12 months, subject to permitting, and develop two more drill-ready targets within 24 months.
It will bear all exploration costs before deciding whether to start production.
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By GlobalDataShould Teako opt for commercial production while Capella retains its 10% interest, a joint venture agreement will be established, detailing each party’s rights and obligations.
If Teako makes a final investment decision for production, accrued costs for Capella will be recovered by netting out 25% of Capella’s joint venture distributions until fully paid.
Should the mine close before Capella’s costs are fully paid, the remaining balance will be forgiven.
The agreement also includes co-sale rights, allowing or obligating Capella to sell its 10% interest if Teako decides to sell its stake.
Teako must offer Capella the opportunity to purchase its interest on identical terms before any sale.
The Løkken Project is subject to a 2.5% net smelter return royalty to Eurasian Minerals Sweden AB, with a buyback option of 0.5% of the royalty for $1m.
Teako will assume the annual advanced royalty payments, starting at $40,000 and increasing annually to a maximum of $75,000.
To finance the acquisition and drilling operations, Teako is conducting a private placement of up to 11.1 million common shares at C$0.09 each, aiming to raise up to C$1m.
This offering, along with the agreement’s approval, is pending acceptance by the Canadian Securities Exchange.
In 2023, Teako struck a deal to acquire a stake in Capella’s Vaddas and Birtavarre projects in northern Norway.
