Max Resource Corp (TSXV: MXR) this morning had major news. The firm has entered into what is referred to as a binding Cooperation Term Sheet with that of Endeavour Silver Corp (TSX: EDR), related to the firms property in Colombia.
The Cooperation Term Sheet is designed to enable Max Resource to significantly expand its current landholdings within the Cesar copper-silver basin within Colombia, where the firms flagship product is located. To do so, Endeavour will provide what is referred to as “certain financial capabilities” to enable the company to meet required for additional mineral tenures within the country.
In exchange, the new mineral tenures acquired will see a 0.5% net smelter returns royalty attached to them, payable to Endeavour. The arrangement will see Endeavour take a 5.0% stake in Max Resource, via the purchase of 26.0 million units at a price of $0.26 per each.
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Each unit contains one common share and half of a purchase warrant. Warrants are valid for a period of two years from the date of issuance, and contain an exercise price of $0.36 per share. The investments amounts to roughly $6.8 million in gross proceeds. The company will also retain the right to maintain its current equity position as part of the investment, while agreeing to not sell any shares for a period of at least two years.
“Max is privileged to have the strategic support of Endeavour Silver, whose expertise ranges from discoveries to production. We feel that the strategic involvement of Endeavour very much validates our efforts in Colombia to this point. The ultimate goal of the cooperation agreement is for Max to consolidate its landholdings over the Cesar basin, which we believe may be the world’s largest undeveloped copper-silver district,” stated Max Resource CEO Brett Matich on the development.
Max Resource Corp last traded at $0.36 on the TSX Venture.
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