Metal Energy to acquire Highland from Happy Creek
2024-10-04 09:14 ET - News Release
Also News Release (C-HPY) Happy Creek Minerals Ltd
Mr. James Sykes of Metal Energy reports
METAL ENERGY ANNOUNCES ACQUISITION OF HIGHLAND VALLEY COPPER PROJECT
Metal Energy Corp. has made a next step in its growth, having entered into an arm's-length asset purchase agreement with Happy Creek Minerals Ltd. dated Oct. 2, 2024, as amended pursuant to an amending agreement dated Oct. 3, 2024, to acquire the 100-per-cent-owned Highland Valley copper project in British Columbia.
The Highland Valley project spans 240 square kilometres in Southern British Columbia. With its proximity to critical infrastructure like roads, rail and power, the Highland Valley project is just 3.5 hours from Vancouver and 30 minutes from Merritt.
As part of the Ore Group, Metal Energy will leverage its extensive experience across other companies and projects to collect, harmonize and remodel historical data into a comprehensive, modern database. This process will enable the identification of opportunities and trends for future drilling and development.
The project aligns perfectly with Ore Group's strategy of capitalizing on historical data in regions that offer excellent access, infrastructure and proximity to operating mines within established mining districts.
The Highland Valley project is located on the southern edge of the Guichon Creek batholith, which hosts the significant HVC (Highland Valley copper) open pits. Metal Energy's newly acquired land package shares many geological similarities with HVC, particularly in two high-priority areas:
- Zone 1 -- copper-silver-molybdenum mineralization spanning 1,200 metres in length and remains open to the south and at depth, offering expansion potential; the primary copper-rich minerals include chalcocite and bornite;
- Zone 2 -- high-grade copper-gold-silver-molybdenum-rhenium mineralization and notably enriched with gold, setting it apart from typical deposits in the region; like zone 1, it offers potential for resource expansion in all directions.
The project is already permitted to drill and boasts a history of over 55,000 metres of drilling across 402 holes (37,265 metres drilled in 136 holes since 2007). The acquisition brings together a highly prospective, underexplored land package. A systematic drill program will expand known high-potential zones and uncover new targets within the East zone and West zone claims.
The Highland Valley property, under Happy Creek's ownership, was consolidated into a single large land package over 17 years. Most recently, Happy Valley acquired the Mystery property (438 hectares, located in the northern extent of the East zone claims) in 2021. The project was historically operated by Asarco Mining (1970s), Cominco Ltd. (1980s) and Hudbay Minerals (1990s).
Terms of the acquisition
Metal Energy shall acquire 100 per cent of the Highland Valley project from Happy Creek for the following consideration.
On the closing date of the acquisition, the following is payable:
- $300,000 cash, to be paid on or before the closing date to Happy Creek;
- The issuance of common shares in the capital of Metal Energy to Happy Creek representing 9.9 per cent of the issued and outstanding Metal Energy shares;
- A 2.5-per-cent net smelter royalty (NSR) granted to Happy Creek on certain claims of the Highland Valley property, of which 1.5 per cent may be repurchased by Metal Energy for $5-million.
Metal Energy shall pay additional consideration to Happy Creek by:
- Conducting $250,000 in exploration expenditures on the project on or before Dec. 31, 2024;
- The issuance of Metal Energy shares to Happy Creek with a value of $1-million on or before 12 months after the closing date (tranche 1 consideration shares);
- The issuance of Metal Energy shares to Happy Creek with a value of $1-million on or before 24 months after the closing date (tranche 2 consideration shares);
- The issuance of Metal Energy shares to Happy Creek with a value of $1.5-million on or before 36 months after the closing date (tranche 3 consideration shares);
- The issuance of Metal Energy shares to Happy Creek with a value of $2.5-million on or before 48 months after the closing date (tranche 4 consideration shares).
If the issuance of any of the additional consideration shares would result in Happy Creek holding in excess of 19.9 per cent of the issued and outstanding common shares of Metal Energy, Metal Energy shall pay the balance of the applicable payments to Happy Creek in cash. The number of additional consideration shares to be issued shall be determined based on the greater of: (i) the discounted market price (as defined in Policy 1.1 of the TSX Venture Exchange corporate finance manual); and (ii) the volume-weighted average price of the common shares of Metal Energy that trade on the TSX-V, or such other stock exchange upon which the common shares of Metal Energy are listed and posted for trading at such time if such common shares are no longer listed and posted for trading on the TSX-V, for the 30 trading days prior to the date such additional consideration shares are issued, provided that, in any event, no additional consideration shares shall be issued at a price of less than one cent per share.
In addition, provided Happy Creek continues to hold at least 5 per cent of the issued and outstanding shares, Happy Creek will have the right to nominate one director to Metal Energy's board.
Conditions and approvals
This acquisition is subject to approval from the TSX-V and is expected to close in mid-October to late October, 2024, following TSX-V approval.
Qualified person statement
The technical information contained in this news release has been reviewed and approved by Mike Sweeny, PGeo, technical adviser for Metal Energy and a qualified person as defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects.
We seek Safe Harbor.
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