OK2 Minerals (OK.V) is still optimistic on its two assets in British Columbia’s Golden Triangle, but has decided to broaden its horizon by acquiring three projects in Norway and one project in Sweden from EMX Royalty Corp (EMX.V). As part of the new corporate strategy, OK2 Minerals will change its name to Norra Metals while completing a 3-for-1 reverse stock split. Simultaneously, OK2/Norra will be raising C$720,000 by issuing units priced at C$0.06 per unit (on a post-consolidation basis) with each unit consisting of one common share and ½ warrant. Each warrant could be exercised at C$0.10 for a period of two years. Should OK2/Norra raise the entire C$720,000, the 6M warrants would result in an additional cash inflow of C$600,000.
To purchase the projects, OK2 will issue a 9.9% equity position to EMX Royalties, and EMX will retain the right to remain at 9.9% at no cost (i.e. OK2 will have to issue free shares to EMX at every capital raise), until OK2 has raised a cumulative C$5M in equity (it’s unclear if the proceeds from warrant exercises will be included in the calculations). Additionally, OK2 will have to raise and spend at least C$2M in the first two years, otherwise the equity stake of EMX will increase to 14.9%.
EMX will also be granted a 3% NSR on all properties, of which OK2 can repurchase 1% for C$2.5M in cash or shares before the 6th anniversary of the deal, and OK2 will make annual advance royalty payments starting from the second anniversary of the agreement. Additionally, EMX will he issued a 1% NSR on the Pyramid project in the Golden Triangle, as well as a 0.5% NSR on any new exploration projects generated by OK2 in Norway and Sweden, unless it’s acquiring properties with an existing mineral resource estimate.
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The author currently has no position in OK2 Minerals. Please read the disclaimer
