Electra Signs Agreement for Sale of PEM 100 Quarry
Vancouver, British Columbia - Electra Stone Ltd. (TSX Venture: ELT) (“Electra”) or (“the Company”) is pleased to announce that it has entered into a purchase agreement (“the Agreement”) with the Linceo Media Group (“LMG”) as it pertains to the ownership and operations of the PEM 100 “Apple Bay” Quarry on Vancouver Island (the “Project”). LMG is a Private Equity group based in Ontario, with experience building and operating industrial mineral facilities. In addition, they offer a management team with an extensive history in environmental project development, community relations and technical operations.
The Offer is a mix of cash and debt retirement for a certain percentage of equity ownership and operational rights.
LMG will purchase all of Electra’s rights under its lease agreement dated September 30, 2002. This includes all concessions as defined in that lease agreement including the Jody Claims, the Howich Claims and the Homegold Claims.
Subject to the terms of the Agreement, LMG has agreed to pay an aggregate purchase price comprised of the following:
- Cash payment of $50,000.00 upon closing;
- 49% of the common shares in the capital of LMG (the “LMG Shares”); and
- Cash consideration of $117,894.23 for the payment, settlement and satisfaction in full of debts owed by Electra upon closing.
The LMG Shares are subject to a share repurchase right allowing LMG to repurchase the amount of LMG Shares that will reduce Electra’s holdings in LMG to ten percent, effective on the occurrence of any of the following events:
- Project level cash expenditures totaling $600,000;
- Receipt of an updated mining permit allowing a minimum extraction of 750,000 metric tonnes of material; or
- The signing of a binding agreement to take the Project public via a reverse merger, initial public offering or other acceptable method that may be contemplated from time to time.
Electra has also granted to LMG’s founder the right of first refusal on the resale of any of the LMG Shares issued to Electra under the Agreement.
LMG covenants and agrees that they will, within 90 days of signing this Agreement, finance the issuance of a new reclamation bond for the above concessions which should return the original reclamation bond to Electra. The issuance of this bond will proceed subject to the satisfaction or waiver of the closing conditions.
John Costigan CEO and President commented “This Agreement strengthens the Company’s balance sheet and allows us to execute on the original plans to bring the PEM 100 Quarry into production. The infusion of fresh capital and an increase in production volumes has always been the route to profitability. The intended goal is to build a large strategic supplier to both the cement and construction industry and provide Electra profit participation at a lower risk”
Closing is expected to take place on January 31, 2017 or such other date as may be agreed to by the Parties in writing, but not later than February 28, 2017. Both Electra and LMG may terminate this agreement at any time prior to closing should the closing conditions not be met.
Electra will continue to focus on its new production and manufacturing opportunities in the Lower mainland while maintaining a continuing interest in the PEM 100 Quarry.
About Electra Stone
Electra Stone Ltd. is building a vertically integrated public Nephrite Jade mining, manufacturing & marketing company. Electra is focused on the development of Architectural and Dimensional jade products along with international market growth and trade of Nephrite Jade from British Columbia into Asian markets with a specific focus on China.
On behalf of the Board of Directors,
President and Director
Forward Looking Statement
The information set forth in this news release contains forward-looking statements that are based on assumptions as of the date of this news release. These statements reflect management’s current estimates, beliefs, intentions and expectations. They are not guarantees of future performance. Electra cautions that all forward-looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond Electra’s control. Such factors include, among other things: risks and uncertainties relating to Electra’s limited operating history, Electra’s ability to produce and sell jade and jade based products, the need to comply with environmental and governmental regulations, Electra’s ability to close the Agreement, Electra’s ability to fully recover its previously paid reclamation bond and the performance of LMG’s obligations under the Agreement. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, Electra undertakes no obligation to update or revise forward-looking information publicly. For a detailed list of risks and uncertainties as it relates to Electra Stone Ltd., please refer to the risks and uncertainties listed in Electra’s MD&A filings for its fiscal year end filed on SEDAR.
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