Piedmont Lithium enters agreements to acquire Killick Lithium interest

Benton Resources and Sokoman Minerals announced the entering into of the Definitive Agreements with Piedmont Lithium and its subsidiaries, enabling Piedmont to earn up to a 70% direct and indirect ownership interest in the area and lands comprising the Golden Hope project to be renamed the Killick Lithium Project, located in southwestern Newfoundland. Pursuant to the terms of the Transaction, each of Benton and Sokoman assigned all of its rights and interests to the Golden Hope Project to Vinland, a newly incorporated British Columbia corporation, in exchange for all of the issued and outstanding shares in the capital of Vinland, held by each in equal proportions, and, in turn, Vinland assigned the Golden Hope Project Rights to its newly incorporated, wholly-owned subsidiary, Killick. Upon the completion of the Reorganization, Vinland and Piedmont, entered into a subscription agreement pursuant to which Piedmont subscribed for a 19.9% ownership interest in Vinland for an aggregate subscription amount of CAD$2.0M; and a shareholders’ agreement with Benton and Sokoman setting forth the framework for the governance of Vinland and for the holding, disposal and subsequent issuances of interests in Vinland. Upon the completion of the Subscription, Killick and Piedmont entered into an earn-in agreement, pursuant to which Piedmont was granted the option to acquire up to a direct 62.5% ownership interest in the Golden Hope Project, a royalty agreement pursuant to which Benton and Sokoman were granted an aggregate 2% royalty on the net returns of precious metals and the value of lithium received from the Golden Hope Project, and a marketing agreement pursuant to which Piedmont was granted the exclusive marketing rights for the promotion and sale of lithium products produced from the Golden Hope Project, including the right to purchase any uncommitted project production on commercially reasonable arm’s length terms, the whole as further set forth below. Upon the acquisition of the Initial Interest, Vinland, Killick, and Piedmont shall enter into a shareholders’ agreement pursuant to which the parties thereto set forth the framework for the governance of Killick and for the holding, disposal, and subsequent issuances of interests in Killick. Pursuant to the Earn-In Agreement, Piedmont was granted the option, exercisable by notice, to acquire a 16.35% voting and participating interest in Killick in consideration of the issuance by Piedmont to each of Benton and Sokoman of shares of its common stock having an aggregate subscription price of CAD$2.0M based on Piedmont’s ten-day volume weighted average price up to the date of the Initial Interest exercise notice, and payment of work expenditures in the aggregate amount of at least CAD$6.0M within the 30-month period following the Initial Earn-In Right exercise notice.Upon exercise of the Initial Earn-In Right by Piedmont, Piedmont’s combined direct and indirect ownership interest in Killick will be equal to approximately 33%. Within 60 days following the funding of the Initial Earn-In Amount, Piedmont shall have the option, exercisable by notice, to acquire an additional 21.65% voting and participating interest in Killick in consideration of the issuance by Piedmont to each of Sokoman and Benton of shares of its common stock having an aggregate subscription price of CAD$2.0M based on Piedmont’s ten-day VWAP up to the date of the First Additional Earn-In Right exercise notice, and payment of work expenditures in the aggregate amount of at least CAD$3.0M within the 12-month period following the First Additional Earn-In Right exercise notice. Upon exercise of the First Additional Earn-In Right by Piedmont, Piedmont’s combined direct and indirect ownership interest in Killick will be equal to approximately 50%. Within 60 days following the funding of the First Additional Earn-In Amount, Piedmont shall have the option, exercisable by notice, to acquire an additional 24.5% voting and participating interest in Killick in consideration of the issuance by Piedmont to each of Benton and Sokoman of shares of its common stock having an aggregate subscription price of CAD$6.0M based on Piedmont’s ten-day VWAP up to the date of the Second Additional Earn-In Right exercise notice, and payment of work expenditures in the aggregate amount of at least CAD$3.0M within the 12-month period following the Second Additional Earn-In Right exercise notice. Upon exercise of the Second Additional Earn-In Right by Piedmont, Piedmont’s combined direct and indirect ownership interest in Killick will be equal to approximately 70%. Concurrently with the entering into the Earn-In Agreement, Killick shall grant an aggregate 2% royalty on the net returns of precious metals and the value of lithium received from the Golden Hope Project to Benton and Sokoman; provided, however, that Killick, Piedmont or any of their successors shall have the right to repurchase 50% of such royalty in consideration for an aggregate cash payment of CAD$2.0M to Benton and Sokoman. As part of the Transaction, Killick and Piedmont entered into a marketing rights agreement granting Piedmont 100% marketing rights and the right to purchase, under a right of first offer, any uncommitted lithium concentrate produced by the Golden Hope Project on commercially reasonable arm’s length terms.