LONDON (ShareCast) - (Sharecast News) - Fulcrum Metals announced on Wednesday that it has signed a binding letter of intent to sell its 100% interest in the Tully Gold Project in Timmins, Ontario, to Loyalist Exploration, a TSX Venture Exchange-listed exploration company.
The AIM-traded firm said that under the terms of the proposed deal, Fulcrum would receive a cash payment of CAD 0.5m (£0.28m) on completion, along with 89,255,000 Loyalist shares, representing a 19.9% stake in the company, subject to adjustment.

It said the shares had an implied value of CAD 0.89m based on a price of one Canadian cent per share.

Fulcrum said it would also retain a 2% net smelter royalty on the Tully Project, with a buyback option of 1% for CAD 1m.

Additional milestone payments would include CAD 0.1m in cash and 30 million Loyalist shares, or equivalent cash, contingent on future project progress.

The board said the transaction would give Fulcrum exposure to a broader portfolio of mineral assets in the Timmins mining district, where Loyalist was expanding its presence with the recent addition of the Loveland and Gold Rush properties.

"This transaction aligns perfectly with our broader strategy to divest exploration assets and focus on the development of our gold tailings projects in Kirkland Lake and the potential commercial opportunities open to us," said chief executive officer Ryan Mee.

"We believe that Tully is a high quality asset that is located in one of the world's most prolific gold districts, and the terms retain significant exposure for Fulcrum in the potential upside through the shareholding and the milestone and royalty structure.

"I look forward to working alongside Loyalist to close this transaction."

Reporting by Josh White for Sharecast.com.

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