Teako Minerals has finalized a definitive agreement to acquire a 90% interest in the Løkken copper-zinc-cobalt (Cu-Zn-Co) project in Trøndelag, Norway, from Capella Minerals. As part of the deal, Teako will issue 2.5 million common shares and pay C$350,000 in cash to Capella by August 30, 2024.
The Løkken project will be merged with Teako’s adjacent Lomunda claims and the Venna projects, collectively known as the Løkken & Venna Projects. This consolidation marks a major advancement for Teako, offering access to promising drill targets, including the Åmot target, which is scheduled for drilling in winter 2024/2025.
In addition to the share issuance and cash payment, Teako is committed to executing a drill program on the Åmot target within 12 months, subject to permitting, and developing two additional drill-ready targets within 24 months. Teako will cover all exploration expenses before making a decision on whether to proceed with production.
If Teako decides to move forward with commercial production while Capella retains its 10% stake, a joint venture agreement will be formed to outline the rights and obligations of both parties. Should production commence, Capella’s costs will be reimbursed by deducting 25% from Capella’s joint venture distributions until fully paid. If the mine closes before all costs are recovered, the remaining balance will be forgiven.
The agreement also grants Capella co-sale rights, allowing it to sell its 10% interest if Teako decides to sell its stake. Teako is required to offer Capella the opportunity to purchase its interest on the same terms before any sale.
The Løkken Project is subject to a 2.5% net smelter return royalty held by Eurasian Minerals Sweden AB, with a buyback option of 0.5% of the royalty for $1 million. Teako will also assume annual advanced royalty payments, starting at $40,000 and increasing to a maximum of $75,000.
To fund the acquisition and drilling activities, Teako is conducting a private placement of up to 11.1 million common shares at C$0.09 each, with the goal of raising up to C$1 million. This offering and the agreement are subject to approval by the Canadian Securities Exchange.
In 2023, Teako also secured a deal to acquire a stake in Capella’s Vaddas and Birtavarre projects in northern Norway.
