Karora Resources

Dumont Nickel Project - 8.4 billion pounds of nickel resources - Abitibi

Message: Karora Resources to Sell 28% Stake in Dumont Nickel Project for Up to $48 Million
2020-07-22 09:29:01 AM ET (MT Newswires)

09:29 AM EDT, 07/22/2020 (MT Newswires) -- Karora Resources Inc. (KRR.TO) on Wednesday said it has agreed to sell its 28% stake in the Dumont Nickel Project to two private funds advised by Waterton Global Resource Management Inc. for total consideration of up to $48 million.

Under the deal's terms, Karora will receive $10.7 million at closing, composed of $7.4 million from Waterton for its interest and a $3.3 million refund of Karora's share of the cash held within the Dumont joint venture.

Karora will also have the right to receive a portion of future proceeds of any future sale of or monetization event for Dumont, in which case Karora will be entitled to receive 15% of the net proceeds from the transaction up to a maximum of an additional $40.2 million.

Waterton Global Resource Management, Inc. is the advisor to the two private funds that, at deal closing, will own 100% of Magneto Investments Limited Partnership. Since the formation of Magneto in 2017, the Dumont Nickel Project and all associated assets, permits and agreements have been held 100% by Magneto and have been managed by Karora's team of nickel experts. As part of this transaction, the Dumont management team will fully transition to Magneto.

The transaction is scheduled to close before the end of July.

In addition, Karora plans to file articles of amendment implementing a consolidation of its outstanding common shares on the basis of one post-consolidation common share for every 4.5 pre-consolidation common shares. The consolidation is subject to TSX approval.

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