Nevada Zinc Successfully Completes Mineral Claims Transaction
Nevada Zinc Corporation (“Nevada Zinc” or the “Company”) (TSX-V: NZN) has reached a significant milestone by finalizing the sale of its mineral claims located in Nevada. This completion comes as part of a previously announced transaction with Minaurum Gold Corp (“Minaurum”), effectuating a strategic move as detailed in their recent communication.
Details of the Mineral Claims Transaction
The mineral claims involve a total of 203 claims located specifically in Eureka County, Nevada. This portfolio encompasses:
(i) 1 patented claim and 26 unpatented lode claims, all fully owned by the Company's subsidiary, Lone Mountain Zinc Ltd. (collectively referred to as the “Owned Claims”); and
(ii) 176 additional unpatented lode claims, which are held under a long-term lease agreement described as the “Lease.”
As part of the agreement terms, Nevada Zinc allowed Minaurum an exclusive option to acquire 100% ownership of both the Owned Claims and lease rights to the Leased Claims. Minaurum exercised this option through the issuance of 3,846,893 common shares valued at approximately $1,000,000, alongside a cash payment of $100,000. Importantly, these shares will be subject to restrictions regarding transferability following a statutory hold period.
Shareholder Approval and Future Listings
The shareholders of Nevada Zinc voiced their approval for this significant transaction during a special meeting held earlier this year. As the procedure unfolds, it is crucial to note that the Company will not meet the Tier 2 Continued Listing Requirements set by the TSX Venture Exchange, resulting in a transfer of its shares to the NEX Board.
Funding Through Secured Loan
On another note, Nevada Zinc has also disclosed the advancement of a secured loan amounting to $173,321.07, facilitated by director Jim Beqaj. The funds obtained from this loan were allocated toward fulfilling the annual rental obligations under the Lease, covering some operational expenses including auditor fees.
This loan carries an annual interest rate of 10% and was initially set to mature at the end of the fiscal year. Yet, a verbal agreement was reached to extend this maturity until the Company is in a position to implement repayment plans, formalized through an amending agreement. As per the terms, the lender was granted a security interest in the patented claim.
Understanding Related Party Transactions
It's significant to acknowledge that this loan is classified as a “related party transaction” due to the director's involvement. Such transactions are regulated under Multilateral Instrument 61-101, prompting Nevada Zinc to apply for exemptions from specific formal valuation rules as the loan terms did not exceed 25% of the Company’s overall market capitalization.
Strategic Objectives of Nevada Zinc
As Nevada Zinc moves forward with strategic maneuvers like the completed sale and participation in loans, the aim remains focused on enhancing shareholder value. The Company is actively exploring new alternatives that could yield positive results in the future.
Company Contact Information
For any inquiries relating to Nevada Zinc, stakeholders can reach out to:
Mike Wilson, President & CEO
T: (416) 574-9075
Email: wilson.h.mike@gmail.com
Don Christie, CFO
T: (416) 409-8441
Email: don@nevadazinc.com
Frequently Asked Questions
What mineral claims did Nevada Zinc sell?
Nevada Zinc sold 203 mineral claims in Eureka County, Nevada, including patented and unpatented lode claims.
What was the value of the shares received from Minaurum?
The Company received shares valued at approximately $1,000,000 as part of the transaction.
Who facilitated the secured loan to Nevada Zinc?
The secured loan was advanced by Jim Beqaj, a director of the Company.
What is the interest rate on the secured loan?
The secured loan carries an interest rate of 10% per annum.
What are Nevada Zinc's future plans?
Nevada Zinc is exploring strategic alternatives to enhance shareholder value and optimize its operations.
