Capella Sells Savant Gold Project to Prospector Metals

Rhea-AI Summary

Capella Minerals announces Property Acquisition Agreement with Prospector Metals Corp. for Savant Gold Project. Prospector to acquire 100% interest in the project, with Capella retaining a 1% Net Smelter Royalty. Eric Roth, Capella's President, highlights the strategic move to focus on Scandinavian projects.

Insights

Market Research Analyst

The agreement between Capella Minerals Ltd and Prospector Metals Corp for the acquisition of the Savant Gold Project is a strategic move that could potentially influence the stock performance of both companies. The transaction includes a cash payment, share issuance and a retained Net Smelter Royalty by Capella, which provides a diversified revenue stream and retains exposure to the project's future success.

From a market perspective, the focus on Capella's Scandinavian projects aligns with the growing interest in battery metals, which are important for electric vehicles and renewable energy technologies. This pivot could make Capella more attractive to investors interested in these sectors. Prospector's acquisition enhances its asset portfolio, potentially increasing its appeal to investors looking for gold exploration opportunities.

Financial Analyst

The financial terms of the Property Acquisition Agreement, including the immediate cash payment and share issuance, will have a direct impact on Capella's liquidity and market capitalization. The Net Smelter Royalty serves as a hedge, offering Capella long-term value from the Savant Gold Project without the associated operational risks. Investors should monitor the regulatory approval process, as delays or rejections could affect the companies' stock prices.

Additionally, the strategic divestiture aligns Capella's operations, potentially improving its financial metrics by reducing overhead costs and focusing capital on projects with higher perceived growth potential in the battery metals market.

Mining Sector Analyst

The sale of the Savant Gold Project is indicative of Capella Minerals Ltd's strategic shift towards minerals that support the green economy, such as copper and battery metals. This reflects broader industry trends where mining companies are realigning their portfolios to meet future demand dynamics. The technical information provided by Capella, adhering to NI 43-101 standards, offers assurance of the project's exploration progress and potential, which is a positive signal for investors interested in Prospector Metals Corp's future gold exploration endeavors.

Investors should consider the implications of Capella's retained Net Smelter Royalty, as it suggests confidence in the project's prospective yield. The royalty agreement also reflects a common practice in the mining industry to secure future revenue streams without the burden of operational costs.

VANCOUVER, BC, April 4, 2024 /PRNewswire/ - Capella Minerals Ltd (TSXV: CMIL) (OTCQB: CMILF) (FRA: N7D2) ("Capella" or the "Company") is pleased to announce that it has entered in to a Property Acquisition Agreement with Prospector Metals Corp. (TSXV: PPP) ("Prospector") through which Prospector will acquire a 100% interest in the Savant Gold Project in Ontario, Canada. Prospector has been exploring the Savant Gold Project through an Earn-In Agreement announced in September, 2020, and has defined a number of high-grade gold targets from work conducted within both the extensive Iron Formation sequences (e.g. the Snowbird, Horseshoe targets) and the Wiggle Deformation Zone (see Company News Release dated June 28, 2022).

Terms of the Property Acquisition Agreement

Prospector will acquire a 100% interest in the Savant Gold Project from Capella in accordance with the following terms:

1. Prospector to make a cash payment to Capella of CAD 50,000 on closing;
2. Prospector to issue Capella 1,000,000 common shares (with a standard regulatory hold period of 4 months) upon closing; and,
3. Capella to retain a 1% Net Smelter Royalty ("NSR") on any potential future production from the property (with 0.5% being purchasable at any time for CAD 1,000,000).  

The Property Acquisition Agreement replaces the existing Earn-In Agreement in its entirety, and closing will be subject to TSX Venture Exchange (and other regulatory) approvals being obtained.

Eric Roth, Capella's President and CEO, commented: "The sale of the Savant Gold Project to our Joint Venture partner Prospector is consistent with our flagged strategy of exiting our precious metals projects in the Americas and focusing on our Scandinavian copper, gold, and battery metal projects. Ultimately, the successful sale of our assets in Canada and Argentina will lead to Capella having a more streamlined portfolio and a more clearly-defined strategy going forward.

Whilst we have relinquished our direct interest in the Savant Gold Project, we strongly believe in the potential for new high-grade gold discoveries on the property and Capella shareholders will retain upside to all future exploration success through both the Prospector shareholding and the NSR from potential future production. I also look forward to keeping the market updated on our divestiture efforts at our Sierra Blanca (Argentina) and Domain (Manitoba) projects".  

Qualified Persons and Disclosure Statement

The technical information in this news release relating to the Savant Gold Project has been prepared in accordance with Canadian regulatory requirements set out in NI 43-101, and approved by Eric Roth, the Company's President & CEO, a Director, and a Qualified Person under NI 43-101.  Mr. Roth holds a Ph.D. in Economic Geology from the University of Western Australia, is a Fellow of the Australian Institute of Mining and Metallurgy (AusIMM) and is a Fellow of the Society of Economic Geologists (SEG). Mr. Roth has 35 years of experience in international minerals exploration and mining project evaluation.

On Behalf of the Board of Capella Minerals Ltd.

"Eric Roth"

___________________________

Eric Roth, Ph.D., FAusIMM
President & CEO

About Capella Minerals Ltd

Capella is engaged in the acquisition, exploration, and development of quality mineral resource properties in favourable jurisdictions with a focus on European base and battery metals projects.

On October 17, 2023, the Company entered in to a binding asset sale agreement with NickelX, a private Norwegian mining company, through which it will divest its 100% interests in the Hessjøgruva, Kjøli, and Lokken projects copper-zinc-cobalt projects in Trøndelag, central Norway. NickelX currently holds 100% interests in four nickel exploration projects in northern Norway and is in the process of undertaking an Initial Public Offering ("IPO") on Oslo's Euronext Growth Exchange with the objective of becoming Norway's leading independent battery metals company. The transaction proceeds, payable upon completion of the NickelX IPO, include a combination of cash and NickelX shares, which Capella intends to distribute to its shareholders on a pro-rata basis. The Long-Stop Date for the current agreement is April 7, 2024.

The Company continues to explore the Northern Finland Gold-Copper project in the Central Lapland Greenstone Belt, together with JV partner Cullen Resources Ltd (ASX: CUL). A total of six exploration permits have now been approved, including the priority Killero East Cu-Au target. In central Finland, the Company´s focus is on the discovery of lithium and rare-earth element deposits at both its Perho reservation, in addition to an extensive package of properties in the broader Keliber district through a JV with European Energy Metals Corp (formerly Hilo Mining)(TSXV: FIN).

Capella also retains exposure to exploration success in precious metals projects through its Joint Venture with Agnico Eagle Mines Ltd (formerly Yamana Gold Inc.)(TSX/NYSE: AEM) at the Domain Gold Project, Manitoba (Capella 29.6% interest). The Company also retains a 49% interest in the Sierra Blanca Gold-Silver Project in Santa Cruz, Argentina, which is currently being explored by Austral Gold Ltd (TSXV: AGLD; ASX: AGD).

Cautionary Notes and Forward-looking Statements

This news release contains forward-looking information within the meaning of applicable securities legislation. Forward-looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. Such statements include, without limitation, statements regarding the future results of operations, performance and achievements of Capella, including the timing, completion of and results from the exploration and drill programs described in this release.  Although the Company believes that such statements are reasonable, it can give no assurances that such expectations will prove to be correct.  All such forward-looking information is based on certain assumptions and analyses made by Capella in light of their experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. This information, however, is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Important factors that could cause actual results to differ from this forward-looking information include those described under the heading "Risks and Uncertainties" in Capella's most recently filed MD&A. Capella does not intend, and expressly disclaims any obligation to, update or revise the forward-looking information contained in this news release, except as required by law. Readers are cautioned not to place undue reliance on forward-looking information.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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SOURCE Capella Minerals Limited

FAQ

What is the agreement between Capella Minerals and Prospector Metals Corp. regarding the Savant Gold Project?

Prospector will acquire a 100% interest in the Savant Gold Project from Capella, with Capella retaining a 1% Net Smelter Royalty on potential future production.

What payment and shares will Prospector provide to Capella as part of the agreement?

Prospector will make a cash payment of CAD 50,000 to Capella on closing and issue 1,000,000 common shares to Capella upon closing.

What regulatory approvals are required for the Property Acquisition Agreement to close?

The closing of the agreement will be subject to TSX Venture Exchange and other regulatory approvals being obtained.

Who is Eric Roth and what is his role in the agreement?

Eric Roth is the President and CEO of Capella Minerals He commented on the strategic move to focus on Scandinavian projects and the potential for new high-grade gold discoveries on the Savant Gold Project.

What technical information is disclosed in the news release regarding the Savant Gold Project?

The technical information in the news release has been prepared in accordance with Canadian regulatory requirements set out in NI 43-101 and approved by Eric Roth, the Company's President & CEO, a Director, and a Qualified Person under NI 43-101.