Naughty Ventures Updates Strategic Option Agreement with Sorrento Resources to Advance Rare Earth Element Property
Executive Summary
- Naughty Ventures and Sorrento Resources have amended their definitive option agreement for the sale of up to 100 % of the Bottom Brook rare‑earth property.
- The revised terms outline a staged payment schedule combining cash, Sorrento common shares, and exploration expenditures over a three‑year period, with a total potential issuance of up to 20 million Sorrento shares and cash payments of up to CAD 2.5 M.
- Closing is conditioned on Sorrento securing at least CAD 3 M of financing and obtaining required consents; a 10 % finder’s fee will be paid to Kluane Capital FZCO on each payment/issuance.
Key Details
- Option Structure: Sorrento may acquire up to 100 % of Naughty Ventures’ interest in the Bottom Brook REE property by meeting cash, share‑issuance, and expenditure milestones.
- Payment Schedule:
| Milestone (from Closing) | Minimum Expenditures (CAD) | Cash Payment (CAD) | Sorrento Shares Issued | Earned Interest |
|---|---|---|---|---|
| Within 12 months | $1,000,000 | Nil | 9,000,000 (1) | 49 % |
| Within 24 months | $1,500,000 | $250,000 (2) | 11,000,000 (2)(3) | 31 % |
| Within 36 months | Nil | Nil | Shares equal to 10 % of Sorrento’s outstanding shares (3) | 20 % |
- Share Issuance Details:
- (1) The 9 M shares are issued on the Closing Date.
- (2) The $250 k cash and 11 M shares are due one year after Closing.
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(3) If any issuance would give Naughty Ventures ≥20 % of Sorrento’s common stock, shareholder approval is required.
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Final Interest Option: After the above milestones, Naughty Ventures retains a 20 % free carried interest in the property indefinitely unless Sorrento satisfies the “Final Interest Option” by issuing additional shares equal to 10 % of Sorrento’s outstanding shares.
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Operator Role: Sorrento will act as operator for all work on the Bottom Brook Property throughout the option term.
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Financing Condition: Closing is subject to Sorrento completing a financing of at least CAD 3 M, obtaining all necessary consents/approvals, and satisfying customary closing conditions.
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Finder’s Fee: Sorrento will pay Kluane Capital FZCO a fee equal to 10 % of each cash payment and share issuance made under the option agreement, payable in cash or shares as applicable.
Notable Quotes
“We are pleased to refine our partnership with Sorrento Resources, aligning incentives and providing a clear path toward unlocking the value of the Bottom Brook rare‑earth property.” – Blair Naughty, CEO & President, Naughty Ventures Corp.