Teako to sell 90% of five Norwegian projects

Executive Summary

• Teako Minerals Corp. has entered into a definitive agreement to sell a 90% interest in five Norwegian copper, zinc, gold, and silver projects to Nordic Minerals AS (a subsidiary of United Minerals Australia Pty. Ltd.).
• Teako retains a 10% non-dilutive, free carried interest in the projects until the final investment decision (FID) or commercial production, with no cost obligations to Teako until that point.
• The transaction includes immediate cash consideration, a contingent milestone payment, and binding exploration expenditure commitments from Nordic Minerals.

Key Details

• Transaction Structure: Sale of 90% interest in five projects (Mykkelvika, Heimdalhaugen, Sivilvangen, Klasberget, and Hellemyr) to Nordic Minerals AS.
• Immediate Consideration: 1.45 million Norwegian kroner (approx. $200,000 USD), payable within five business days of the agreement date.
• Contingent Consideration: An additional 2.7 million Norwegian kroner (approx. $370,000 USD) payable if the projects collectively achieve an aggregate mineral resource of at least 10 million tonnes (reported per JORC standards, no minimum grade).
• Retained Interest: Teako retains a 10% non-dilutive free carried ownership interest through the FID.
• Cost Obligations: Teako is not responsible for JV establishment costs or project financing until commercial production commences. Post-production, costs and distributions are pro rata.
• Exploration Commitments:
  • Nordic must incur a minimum of $700,000 in aggregate exploration expenditures within the first 24 months.
  • Shortfalls in the initial 24-month expenditure are payable to Teako as a credit for future geological services.
  • Nordic must use commercially reasonable efforts to incur $5 million in aggregate exploration expenditures over a 60-month period.
• Anti-Dilution: Teako has anti-dilution protections ensuring its free carry is not impacted by JV financing until commercial production.
• Dividends/Distributions: Distributions to parties begin only after any financing loans to the JV are repaid from production revenues. Teako has no parent repayment obligations if the mine closes prior to loan repayment.

Notable Quotes

• Sven Gollan, CEO of Teako Minerals: "The team behind United Minerals has extensive experience in financing and developing mineral projects... This in-depth expertise, combined with the exciting potential of these projects... will make a significant contribution to the revitalization of historic mining regions in Norway."
• Board of United Minerals: "We are pleased to announce the establishment of a partnership with Teako... We believe this integrated approach has the potential to unlock value, reduce legacy environmental impacts, and deliver long-term benefits for local communities, regulators and shareholders alike."