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(TSXV: ROY.H)
VANCOUVER, Oct. 2, 2015 /CNW/ - Royce
Resources Corp. (TSX-V: ROY.H) ("Royce" or the
"Company") is pleased to announce that it has signed a
letter agreement ("LOI") with 1045564 B.C. Ltd.
("1045564") effective October 1,
2015, relating to an acquisition by Royce of all the issued
and outstanding securities of 1045564 from the shareholders thereof
(the "Transaction"). 1045564 is a privately held company led
by Brian-Paes Braga that holds an
option to acquire the NSP Lithium Claim Group from Clayton Valley
Lithium Inc. ("Clayton
Valley").
Transaction Summary
The Transaction is expected to be effected by way of a share
purchase agreement or similar transaction whereby the shareholders
of 1045564 (the "Shareholders") will transfer all of the
issued and outstanding shares of 1045564 to Royce in consideration
for the issuance of 5,000,000 common shares of Royce to the
Shareholders, resulting in 1045564 becoming a wholly owned
subsidiary of Royce.
1045564 has an option (the "Option") to acquire a 100%
interest in the NSP Lithium Claim Group (the "Property")
from Clayton Valley Lithium Inc., a privately held arm's length
company. 1045564 has paid a non-refundable deposit of US$40,000 to Clayton Valley. On the Closing
Date Royce must pay US$100,000 and
issue 1,000,000 common shares to Clayton Valley.
In addition, in order to exercise the option and earn the 100%
interest in the Property, Royce must:
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a)
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pay US$250,000 in
cash to Clayton Valley on each of the first, second, third and
fourth anniversaries of the Closing Date;
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b)
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issue to Clayton
Valley, on each of the first, second, third and fourth
anniversaries of the Closing Date that number of common shares in
four equal tranches (less the 1,000,000 common shares issued on the
Closing Date) as shall represent, in the aggregate, 9.9% of the
outstanding common shares of Royce as at the Closing
Date;
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c)
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incur a minimum of
US$4,500,000 on exploration expenditures on the Property over a
three year period and deliver a pre-feasibility study on the
Property by no later than the fourth anniversary of the Closing
Date.
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On Closing it is anticipated that Royce will have approximately
22,329,063 shares outstanding. The annual share payments
referenced in (b) above will therefore be approximately 302,644
shares each.
In addition, Royce has agreed to issue an additional 1,000,000
common shares to Clayton Valley upon completion of a inferred
resource calculation that confirms the presence on the Property of
a minimum of 100,000 tons LCE grading no lower than a 28ppm Li
grade average, and shall pay US$2,000,000, in cash or in common shares (or a
combination) at the option of Royce, upon completion of a positive
economic feasibility study on the Property.
Clayton Valley will be granted a
2.5% royalty on revenues derived from the sale of lithium
concentrate and other ores or minerals extracted from the Property
and Royce has agreed to pay a minimum annual advance royalty of
US$250,000 to Clayton Valley
commencing on the fifth anniversary of the Closing
Date. Royce shall have the right to buy 1.5% of the
Royalty at any time for US$3,000,000.
Upon Clayton Valley locating and
recording 186 specified additional claims, Royce has agreed to
acquire the claims in consideration for payment to Clayton of
US$500 per claim. Royce has
also agreed to make minimum exploration expenditures on 41 of the
additional claims of $250,000 within
two years.
In connection with the Transaction, Royce has agreed to complete
a concurrent financing for aggregate proceeds of $900,000, consisting of 6,000,000 common shares
at $0.15 per share.
The parties have agreed to use their reasonable best efforts to
conclude a definitive agreement in respect of the transaction by
October 30, 2015.
At closing, it is expected that Brian
Paes-Braga will become the CEO of Royce Resources Corp.
The Transaction is subject to the prior approval of the TSX
Venture Exchange.
The Property
The Property consists of 77 unpatented placer claims covering
1540 acres located in Clayton Valley, Esmeralda County,
Nevada. Clayton Valley is the
site of the only lithium brine production operation in North America which has been in production
since 1966. There are now 7 publically acknowledged aquifers
on the producing property in Clayton Valley and Pure Energy
Minerals, who owns the Clayton Valley South Project, has recently
released an inferred resource of 816,000 tons of lithium carbonate
equivalent on the Clayton Valley South Project. The
Property is contiguous to private lands and placer claims belonging
to the lithium production facility of Albermarle Corporation
(NYSE:ALB) and two Albermarle production wells lie along the
boundary of the Property. Drilling and exploration are active
in the basin and the permitting process is well established.
ON BEHALF OF THE BOARD OF DIRECTORS
"Geir Liland"
Geir Liland,
Chief Executive Officer and Director
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 news release.
SOURCE Royce Resources Corp.