5 February 2024
(February 5, 2024) North Arrow Minerals Inc. (TSXV-NAR) (“North Arrow”) announces it has granted Springbok Holdings Inc. (“Springbok”) a 2% diamond royalty on its 100% owned LDG Project in the Northwest Territories. In exchange, Springbok has agreed to waive its right to receive a future $1 million share payment from North Arrow, which could have been triggered as early as this year if exploration proceeds as planned at newly discovered spodumene pegmatites on the property. The royalty will apply only to future diamond production and will not apply to other commodities, including lithium.
Ken Armstrong, President and CEO of North Arrow commented, “Today’s news allows North Arrow to proceed with planned evaluation of the SD2 and SD4 spodumene pegmatites, discovered in 2023 on the LDG property, without the overhang of a potentially dilutive $1M share payment this summer. While we believe the LDG Project remains prospective for diamonds, our focus over the last 12 months, and looking forward into 2024, is to evaluate the lithium potential of the LDG property and it was therefore important for us to remove the share payment overhang while keeping the property’s lithium mineral rights royalty-free.”
Background and Agreement Details
In April 2013, North Arrow acquired Springbok’s interest in a portion of the current LDG property, as detailed in North Arrow news releases dated October 25, 2012 and April 29, 2013. As part of the acquisition, North Arrow retained an obligation, in certain circumstances, to issue to Springbok that number of common shares of North Arrow having a value of $1 million. As part of the agreement announced today, Springbok has agreed to waive its right to receive this $1 million share payment and North Arrow has granted Springbok a 2% gross overriding royalty on future diamond production from the LDG property. North Arrow may purchase 1% of the royalty (reducing the royalty from 2% to 1%) by making a single payment of $2 million at any time up to 24 months after the date on which the first royalty payment is due. Dr. Chris Jennings, a director of North Arrow, is a principal of Springbok. The new agreement is subject to certain terms and conditions, including the approval of the TSX Venture Exchange.