Madoro enters LOI for Narrow River's Quebec assets

Executive Summary

• Madoro Metals Corp. has signed a Letter of Intent (LOI) to acquire all assets of Narrow River Resources Pty. Ltd. (NRR), a private Australian company, in a proposed reverse takeover transaction.
• The transaction involves Madoro acquiring NRR’s subsidiary holding exclusive exploration rights in Quebec’s Decelles lithium camp in exchange for 95 million common shares of Madoro and a 2% Net Smelter Return (NSR) royalty.
• The combined entity will hold at least 350 exploration rights covering a minimum of 20,000 hectares, positioning it as one of the largest claim holders in the emerging Decelles lithium belt.

Key Details

• Transaction Structure: Madoro will acquire all issued and outstanding shares of NRR’s subsidiary (NRR SubCo) holding the Quebec property.
• Consideration:
  • Equity: 95 million common shares of Madoro.
  • Royalty: A 2% Net Smelter Return (NSR) royalty on the property.
  • Royalty Buyback Option: Madoro has the discretion to buy back 0.5% of the NSR royalty at any time for $1 million.
• Asset Portfolio:
  • The combination of Madoro’s First Green property and NRR’s Decelles assets will comprise at least 350 exclusive exploration rights.
  • Total land package covers a minimum of 20,000 hectares.
  • Location: Decelles mining camp, Abitibi Temiscamingue region, Quebec (approx. 75 km SW of Val d’Or).
  • Contiguous with Madoro’s First Green lithium property; located north of Elevra Lithium’s Tansim project and southwest of Power Metals Corp.’s Decelles project.
• Concurrent Financing:
  • Madoro will conduct a concurrent non-brokered private placement to meet TSX Venture Exchange listing requirements.
  • Proceeds will be used for: (i) transaction and financing expenses; (ii) exploration and other expenses for the property and other Quebec projects; and (iii) working capital.
  • Terms of the financing (price, quantity, warrant terms) are to be determined in the definitive agreement.
• Corporate Governance & Board Composition:
  • Post-closing board will have a minimum of five members: three appointed by Madoro and two by NRR.
  • NRR will have the right to designate two board representatives as long as it holds at least 20% of the issued and outstanding shares on an undiluted basis.
• Regulatory & Listing Status:
  • The transaction is anticipated to constitute a reverse takeover under TSX Venture Exchange Policy 5.2.
  • The resulting entity will continue Madoro’s listing as a Tier 2 mining issuer.
  • Trading in Madoro shares is currently halted and may remain halted until closing.
  • Shareholder approval is required at an annual and special meeting (date to be announced).
• Conditions Precedent:
  • Execution of a definitive agreement.
  • Receipt of a satisfactory technical report (NI 43-101).
  • Receipt of audited/unaudited financial statements for NRR SubCo.
  • No material adverse changes.
  • Regulatory and shareholder approvals.
  • Maintenance of at least 10,519 hectares of exploration rights in good standing or renewed for two years.
  • Completion of the concurrent financing.

Notable Quotes

• Brian Ostroff, Executive Chairman, Madoro: "The combination of the two companies will allow us to focus our combined efforts on advancing these properties... The Decelles area of Quebec has not been widely explored for lithium, but early-stage work by some larger companies in the area has identified it as an area of interest that we will look to exploit."
• Stephen Roux, Director, Narrow River: "Aside from all the operational and geological benefits achieved through the combination of these assets, this transaction will also allow investors the opportunity to participate in a company that will be one of the largest claim holders in this emerging camp... this transaction moves us from being a private company to a public company, providing easier access for qualified investors..."
• Staffan Ever, Chairman, Square Resources Holding Pty. Ltd.: "As a key investor in NRR, we believe this transaction with Madoro offers an opportunity to be involved in a venture that can prove out a future resource with supply potential."