InZinc Enters into Option Agreement on West Desert
Vancouver, British Columbia--(Newsfile Corp. - April 16, 2021) - InZinc Mining Ltd. (TSXV: IZN) ("InZinc" or the "Company") is pleased that, further to the news release of December 22, 2020, it has entered into an agreement (the "Option Agreement") with American West Metals Limited ("American West"), a private Australian company, pursuant to which InZinc granted to a wholly-owned subsidiary of American West an option ("Option") to earn a 100% interest in InZinc's West Desert project ("West Desert") located in Utah, USA. The Option Agreement is subject to, among other things, shareholder and regulatory approval.
"The proposed option agreement will benefit InZinc with improved financial flexibility and exposure to a broader, active portfolio of North American zinc and copper projects. The proposed shareholding in American West will provide InZinc continuing leverage at West Desert as a planned multi-year drill campaign to advance to prefeasibility is undertaken as well as exposure to activities at the Storm copper project, which American West recently optioned from Aston Bay Holdings Ltd. The financial terms offered by the proposed agreement will further provide InZinc the flexibility to advance, including drilling, the near surface discoveries and large untested targets at the prospective Indy Sedex project in BC, and assess new opportunities," said Wayne Hubert, CEO of InZinc.
The principal terms of the Option Agreement include:
1) An initial cash payment of US$500,000 to InZinc on the effective date (the "Effective Date") of the Option Agreement.
2) Required payments to InZinc during the 24 months following the effective date of the Option Agreement to comprise:
- CDN$1,000,000 within 30 days of American West listing its shares on the Australian Securities Exchange ("ASX") through an initial public offering or other going public transaction ("IPO") or 12 months after the Effective Date, whichever is earlier;
- US$1,500,000 upon the announcement by American West to the ASX of a completed Prefeasibility Study for West Desert or 24 months after the Effective Date, whichever is earlier; and
- CDN$2,500,000 by way of shares of American West ranking equally with the shares of American West issued under the IPO (the "Consideration Shares"). If American West has not completed the IPO on the ASX within 12 months of the Effective Date, InZinc may elect to receive CDN$1,250,000 in cash from American West in lieu of Consideration Shares. If American West has not completed the IPO on the ASX within 24 months of the Effective Date, InZinc may elect to receive CDN$2,500,000 in cash in lieu of Consideration Shares.
3) Exercise of Option and Indium Revenue Share
Upon American West having paid the cash payments above and either having delivered the Consideration Shares or having paid the applicable cash payment in lieu of delivering Consideration Shares, American West may exercise the Option and acquire West Desert. InZinc will receive 50% of the revenue from the sale of indium mined from West Desert determined on a Net Smelter Return basis in accordance with generally accepted industry practice ("NSR"). American West will have the right to reduce the NSR to 25% by paying InZinc US$5,000,000 in cash at any time prior to the first sale of indium from the project.
4) Termination of Option
During the Option period, American West will be the operator of West Desert. If payments referred to above are not paid when due and American West does not rectify the failure within 45 days, InZinc would have the right to terminate the Option Agreement and American West shall surrender West Desert promptly to InZinc.
A meeting of InZinc shareholders to consider and, if thought fit, approve the Option Agreement and other matters is expected to be held in May 2021. An Information circular will be filed with regulatory authorities and mailed to InZinc shareholders.
American West Metals Ltd.
American West is targeting to be listed on the ASX in Q3 2021.
InZinc is focused on growth in zinc through exploration and expansion of the advanced stage West Desert project (100%) in Utah and exploration of the early-stage Indy Sedex project (100% option) in British Columbia. West Desert has a large underground resource open for expansion and has district scale exploration potential. A West Desert preliminary economic assessment completed in 2014 forecasted 1.6 billion pounds of zinc production over 15 years. By-products would include copper, magnetite and indium, the latter being identified by the United States in 2017 as a critical mineral. West Desert is well located with easy access and existing infrastructure. The Indy Sedex project comprises near surface discoveries, large untested exploration targets and regional discovery potential. Indy is readily accessible by road from Prince George, the major hub for transportation and heavy industry in central British Columbia and is located 85 kms south of the Canadian National Railway.
InZinc Mining Ltd.
CEO and Director
For further information contact:
Vice President, Corporate Affairs
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities legislation. All statements, other than statements of historical fact, included herein are forward-looking statements. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: "believe", "expect", "anticipate", "intend", "estimate", "plan", "design", "postulate" and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results, performance, or actions and that actual results and actions may differ materially from those in forward-looking statements as a result of various factors, including, but not limited to, those risks and uncertainties disclosed in the Company's Management Discussion and Analysis for the year ended December 31, 2019 and for the nine months ended September 30, 2020 filed with certain securities commissions in Canada and other information released by the Company and filed with the appropriate regulatory agencies. All of the Company's Canadian public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral properties.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/80659