Leading Edge Materials closes Exploration Alliance in Romania

Leading Edge Materials Corp. (“Leading Edge Materials” or “the “Company”) is pleased to report closing of the previously announced exploration alliance focused on lithium ion battery materials in Romania.

In connection with the Alliance Transaction, the Company entered into a share purchase agreement dated April 26, 2018 (the “Share Purchase Agreement”) with an arm’s length party (the “Co-owner”) pursuant to which Leading Edge Materials has acquired an initial 51% interest (the “Initial Interest”), with the right to acquire an additional 39% interest (the “Additional Interest”) (for an aggregate 90% interest), in a Romanian incorporated company (the “Joint Venture Company”) that holds a prospecting permit. In connection with the acquisition of the Initial Interest, Leading Edge Materials issued 367,006 common shares (“Common Shares”) of the Company (the “Initial Shares”) to the Co-owner.

The Company, the Co-owner and the Joint Venture Company have entered into a shareholder joint venture agreement to govern the affairs of the Joint Venture Company (the “Joint Venture Agreement”). Under the terms of the Joint Venture Agreement:

  • In order to earn the Additional Interest, the Company is required to issue to the Co-owner an additional 2,202,036 Common Shares (the “Additional Shares”);
  • Leading Edge Materials will incur all exploration expenditures and shall free carry the Co-owner to production although no firm exploration expenditure commitments are required under the Joint Venture Agreement; and
  • Leading Edge Materials may be required to issue additional Common Shares to the Co-owner to an aggregate maximum of 8,074,136 Common Shares as bonus payments should historic resources or a subsequent National Instrument 43-101 mineral resource estimate on either cobalt, nickel or silver based metal areas exceed certain thresholds.

In connection with the Alliance Transaction, the Company will pay a finder’s fee equal to 5% of the aggregate consideration paid by the Company to the Co-owner under the Share Purchase agreement and the Joint Venture Agreement payable by the issuance of cash and/or Common Shares. The finder’s fee is payable in stages concurrently and conditionally with the issuance of the Initial Shares and Additional Shares. On the closing date of the Alliance Transaction, the finder was issued 18,350 Common Shares.

All Common Shares issued or to be issuable pursuant to the Share Purchase Agreement, Joint Venture Agreement or to the finder in connection with the Alliance Transaction will be subject to a four month hold period expiring four months from the date of issuance.

Blair Way, President and CEO, stated: “We are very pleased to have closed on this transaction and now that the documentation is in place we look forward to initiating work programs and advancing the property. We look forward to providing details on exploration program results when they become available”.

Source: Leading Edge Materials

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