Emergent Metals Corp. To Sell Its Golden Arrow Property To Fairchild Gold

Executive Summary

• Emergent Metals Corp. signed an MOU to sell its Golden Arrow Property to Fairchild Gold.
• The deal includes an upfront US$250,000 deposit, a US$350,000 cash payment upon exchange approval, issuance of 12.5 million Fairchild common shares, and a senior secured note for US$3.5‑5 million with step‑up principal.
• Emergent will retain a 0.5% NSR royalty with an option for Fairchild to purchase it for up to US$1.5 million; the transaction is expected to close within ~30 days pending approvals.

Key Details

• Deposit: US$250,000 non‑refundable payable upon signing the MOU.
• Cash Payment on Exchange Approval: US$350,000 to be paid by Fairchild once the Toronto Venture Exchange approves the transaction.
• Equity Component: Fairchild will issue 12,500,000 common shares to Emergent (≤9.9% of Fairchild’s outstanding shares). Share price is deemed equal to Fairchild’s closing price on the last trading day prior to issuance.
• Senior Secured Note:
• Principal: US$3,500,000 (initial); step‑up to US$4,000,000 in year 4 and US$5,000,000 in year 5 if not redeemed earlier.
• Term: 5 years from the Definitive Agreement date.
• Interest: 8.5% per annum, payable semi‑annually in cash.
• Security: First‑ranking lien over the Golden Arrow Property and related assets.
• Early repayment at Fairchild’s discretion; note holder retains security until full repayment.
• Royalty Retention: Emergent keeps a 0.5% net smelter return royalty on the property.
• Royalty Buyout Options for Fairchild:
• US$1,000,000 payable before the 4th anniversary of the Definitive Agreement.
• US$1,500,000 payable between years 4‑7; rights expire after year 7.
• Escrow & Reclamation Bond: Any pre‑closing royalty obligations are escrowed; Fairchild will fund a US$40,000 reclamation bond upon execution of the Definitive Agreement.
• Operating Cost Transfer: Upon signing the Definitive Agreement, Fairchild assumes BLM and county claim fees, property taxes, royalties, and other holding costs.
• Closing Timeline: Parties aim to execute the Definitive Agreement within 30 days of MOU signing, subject to regulatory and exchange approvals.
• No Finder’s Fees: Transaction is arm‑length with no finder compensation.

Notable Quotes

“The disposition of the Golden Arrow asset for cash, shares, a senior secured note, and royalty interest monetizes Golden Arrow in the short, medium, and long-term… Emergent management believes that Fairchild can advance Golden Arrow through its next stages of development and ultimately towards production.” – David Watkinson, President & CEO, Emergent Metals Corp.