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Fidelity Minerals to acquire 50% of Greensands
2023-02-10 09:20 ET - News Release
Mr. Dean Pekeski reports
FIDELITY AGREES TO PURCHASE 50% OF GREENSANDS AUSTRALIA PTY LTD
Fidelity Minerals Corp. has entered into an agreement dated Feb. 9, 2023, to purchase 50 per cent of Greensands Australia Pty. Ltd. (GAL) which has applied for an exploration licence covering the Florina green sand project in the Northern Territory, Australia. The other 50 per cent is being acquired by Lions Bay Capital Inc. (LBI), which is the largest shareholder of Fidelity.
The Florina green sand project comprises a large, surficial deposit of the mineral glauconite, located 70 kilometres (km) west of the regional town of Katherine, a regional centre 260 km south-southeaset of the port city of Darwin that services well-developed horticulture, agriculture and cattle ranching. Katherine is serviced by major highway and railway infrastructure connecting the state capitals of Darwin and Adelaide.
Previous test work has shown the project to contain significant concentrations of potassium and phosphorous, the major chemical elementals for the production of potash and phosphate fertilizers. Greensands Australia has also filed patent applications covering a process to activate glauconite, which has the effect of greatly increasing glauconite solubility. The company believes this process has high strategic potential to render glauconite as feedstock for the production of organic potassium and phosphate fertilizers.
The company is pleased to acquire the Florina green sand project and will endeavour to accelerate Fidelity's entry into the rapidly growing organic, low-chloride regional and global fertilizer market in collaboration with Lions Bay.
Under the terms of the agreement with GAL and the vendors (John Canaris and Tracker Geoservices Pty. Ltd), Fidelity will:
- Issue two million ordinary common shares at six cents per share, which will be restricted from trading for one year, upon GAL receiving the exploration license;
- Agree to finance it 50-per-cent share of stage 1 costs estimated to be $250,000 (Australian) (Fidelity's share -- $125,000 (Australian));
- Agree to finance its share of stage 2 costs estimated to be $1-million (Australian), including a scoping study (Fidelity's share estimated to be $500,000 (Australian));
- Upon completion of the scoping study, issue an additional two million ordinary common Fidelity shares;
- Should the scoping study show a pretax IRR (internal rate of return) of over 19 per cent, then the vendors will be entitled to a bonus payment of $1-million (Australian) to be satisfied by cash and shares (with a minimum 50 per cent in cash).
The acquisition remains subject to the satisfaction of customary conditions before closing, including exchange approval for the issuance of common shares.
The Florina green sand project tenement application is expected to be granted in the current quarter and this granting will trigger completion of the agreement. On completion, Mr. Canaris will be invited to join the board of Fidelity and remain general manager of Greensands Australia.
Fidelity's management team has over 50 years of combined fertilizer project development experience and is excited to have negotiated the acquisition of this new high-value fertilizer opportunity. Dean Pekeski, chief executive officer of fidelity, commented: "Recent political and social unrest in Peru has prompted the board to look to diversify Fidelity's asset base. Given the commercial and market success of Verde Agritech in Brazil and the growing awareness of natural green sand fertilizers, the Florina project offers an exciting exploration and agri-tech opportunity. The recent adoption rate of green sand fertilizers by the agriculture sector suggests that green sand fertilizer uptake is poised for major growth and that Fidelity will be rapidly positioned to participate in this environmentally responsible growth."
Fidelity remains committed to advance its exploration efforts at the Las Huaquillas project in Peru by completing drill permitting, environmental studies, and negotiate access to underground workings against the current political and social backdrop in Peru. Fidelity hopes to progress these items during H1 2023.
About Fidelity Minerals Corp.
Fidelity Minerals has assembled a portfolio of high-quality mining assets in Peru and aims to delineate major deposits on these properties that could attract the interest of mid-tier and major mining companies. Fidelity has a portfolio of four key assets in Peru and is currently focused on progressing its most advanced project -- Las Huaquillas. Fidelity is also looking to opportunistically expand its project portfolio with accretive acquisitions. The company is backed by an experienced management team with diverse technical, market and commercial expertise and is supported by committed and sophisticated investors focused on building long-term value.
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