Troilus unveils $40 million property deal with Sayona

Troilus Gold Corp. [TLG-TSX, CHXMF-OTCQB] said Wednesday it has agreed to sell a basket of select Quebec properties to emerging lithium producer Sayona Mining Ltd. [SYA-ASX, SYAXF-OTCQB].

In return for transferring the package of 1,824 claims, covering 985 square kilometres to a subsidiary of Sayona, Troilus will receive 184.3 million shares of Sayona, priced at 21.7 cents, and worth $40 million. In addition, Troilus will be granted a 2% net smelter return royalty on all mineral products produced from the transferred claims. However, Sayona can repurchase 100% of the NSR for $20 million at any time from a date that is 30 days before the start of commercial production on any of the transferred claimis

As well, Sayona has pledged to subscribe for $4.8 million worth of Troilus common shares, on a non-brokered private placement basis, a move that will leave Sayona with a 9.26% stake in Troilus.

Australia-listed Sayona has established a lithium hub in Quebec and says it is advancing towards recommencement of production at the North American Lithium Mine (NAL) in the first quarter of 2023.

Troilus is a Quebec-focused exploration and early-stage development company. It is aiming for a mineral expansion and potential restart of the former gold and copper Troilus mine. The Troilus property is located northeast of the Val d’Or district, within the Frotet-Evans Greenstone Belt in Quebec.

“The sale is for claims considered at present to be non-core assets of the company as our current focuses are on the development and exploration of well-defined targets over the 400 square kilometres that we have retained all while advancing the development of the Troilus project,” said Troilus CEO Justin Reid.

News of the deal comes just 48 hours after Jourdan Resources Inc. [JOR-TSXV, JORF-OTCQB-2JR1-FRA] announced details of an earn in agreement and joint venture deal with Sayona subsidiary North American Lithium Inc. in relation to Jourdan’s Vallee lithium project, which is located north of Val d’Or, Quebec.

Jourdan is aiming to become the next lithium producer in Quebec. The company’s properties are located primarily in the spodumene-bearing pegmatites of the La Corne Batholith, around North American Lithium’s (NAL) Quebec Lithium Mine.

Under the agreement, NAL can earn a 51% stake in 28 claims located within the Vallee project, which includes pegmatite targets located close to and along strike from NAL’s orebody. NAL can earn a 50% interest by spending $10 million within two years. It can increase its stake to 51% by completing a feasibility study and arranging funding for the construction of a mine at Vallee.

Sayona subsidiary, Sayona Quebec, is acquiring 27 million common shares of Jourdan (representing a 9.9% interest) at $0.0556 per share, generating gross proceeds of $1.5 million.

On November 15, 2022, Troilus shares closed at 49 cents and currently trade in a 52-week range of 93 cents and 33.5 cents.

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