Grid Metals Corp. (TSXV:GRDM)(OTCQB:MSMGF) announced the start of a drill program at its Campus Creek Lithium Property near Ignace Ontario and announced the buy out of a joint venture partner option to purchase an effective 15% additional interest in the Campus Creek and Donner Lake Lithium joint ventures. The option buy out is in return for 7,142,858 common shares of the Company and is subject to regulatory approval.
Campus Creek Lithium Project Drilling to Commence
Grid has signed a drill contract with Azi Drilling Ltd of Dryden, Ontario to test the Campus Creek Lithium Project located near Ignace, Ontario which is located approximately 240 km northwest of Thunder Bay, Ontario. Drilling is expected to commence early to mid July on the Highstone Dyke. The target is a surface spodumene (Lithium) bearing occurrence that returned an Li2O select grab sample value of 4.35% along with other lower values. (see GRDM NR Oct 5th, 2021 and table below.) Approximately 1,000 meters of drilling is planned in the first phase of drilling.
The phase one drilling at Campus Creek is designed to understand the orientation of the lithium-bearing dyke and possible extensions.
Highlights from analyses of selected grab samples taken from the initial showing of spodumene-bearing pegmatite at the Highstone Dyke, Campus Creek Lithium Project:
QA/QC, and Analytical Work
All samples referenced in this news release were analysed at Actlabs (Ancaster) using a sodium peroxide fusion digestion method and a variety of analytical finishes including atomic absorption, XRF, ICP and ICP-MS. Grid maintains a rigorous QA/QC protocol for all of its exploration programs including inserting of analytical blanks, duplicates and commercial standards at regular intervals (generally one QA/QC sample is inserted every ten samples). The results reported herein all passed Grid’s QA/QC thresholds for standard and blank accuracy for the key rare metals of interest on the property, i.e., lithium, cesium and tantalum.
Carey Galeschuk, P.Geo., has reviewed and approved the technical content of this release.
Buy Out of Joint Venture Partner Option
In 2021, the Company sold a 25% interest in its Donner Lake and Campus Creek lithium projects to Lithium Royalty Corp. (LRC), which at the time was controlled by investment funds managed by Waratah Capital Advisors Ltd. The Company entered into joint venture agreements with LRC to develop each of the projects (the Joint Ventures). Grid retained a 75% interest in the projects and is the operator of the joint ventures.
Under the terms of the original November 2021 financing and purchase agreement, the Company created a single purpose subsidiary in order to hold its Joint Venture interests and granted LRC an option (the Option) to acquire 20% of that subsidiary, which, if exercised, would have increased LRC’s effective interest in the joint ventures to 40%.
In March 2023, LRC assigned its rights and interests in the Joint Ventures and the Option to Li Equities Investments LP (LEI), an investment fund managed by Waratah Capital Advisors. Grid and LEI have now entered into an agreement dated July 3, 2023 (the Termination Agreement) to cancel the Option in consideration for the Company issuing 7,142,858 common shares of Grid to LEI.
Upon completion of the Termination Agreement, LEI will own a total of 25,105,262 common shares of Grid. The Termination Agreement is subject to the approval of the TSX Venture Exchange (TSXV) and other customary closing conditions. If the approval of the TSXV is not obtained within 90 days, LEI has the right to cancel the Termination Agreement.
Upon completion of the Termination Agreement, Grid will be able to continue to actively advance its 75% project interests through the joint venture structure. The Donner Lake Joint Venture is targeting near term production through a toll milling agreement with the currently producing Tanco Mine.
