Strategic partnership positions Greenland Mines to lead exploration while Neo retains equity stake and offtake rights
Neo Performance Materials Inc. (“Neo” or the “Company”) (TSX: NEO; OTCQX: NOPMF) today announced that its wholly-owned subsidiary, Neo North Star Holdings Inc. (“NNSH”), together with the other shareholders have entered into an agreement and plan of merger (the “Agreement”) with Greenland Mines Ltd. (“Greenland Mines”) to effectively transfer the outstanding shares of Neo North Star Resources, Inc. (“NNSR”) to Greenland Mines, which holds mineral exploration license covering the Sarfartoq Carbonatite Complex (the “Sarfartoq Project”) in Southwest Greenland, for total consideration of US$35 million, comprised of US$20 million in cash and US$15 million in shares of Greenland Mines. NNSH currently owns 43.69% of the outstanding shares of NNSR. The transactions contemplated by the Agreement do not affect the terms of the MOU that NNSH entered into with NNSR regarding the negotiation and execution of a definitive offtake agreement for up to 60% of the ore or mineral concentrate produced from the Project.
The partnership positions Greenland Mines to take the lead in advancing the Sarfartoq Project, while Neo retains equity interest in Greenland Mines. This structure enables Neo to continue focusing on its core midstream and downstream expansion strategy, while ensuring that the Sarfartoq Project benefits from dedicated leadership and investment to unlock its full potential.
The transaction is subject to customary closing conditions, including approval from the Government of Greenland under the Greenland Mineral Activities Act.
“We wish Greenland Mines every success as they advance this project, while we maintain our commitment as an offtake partner and shareholder,” said Rahim Suleman, President and Chief Executive Officer of Neo. “This agreement reflects our disciplined approach to capital allocation and reinforces Neo’s strategic identity as a midstream and downstream advanced materials company, where we create the most value for our customers and shareholders.”
Source: www.neomaterials.com
Aleksei Andrievskii is the founder of the ANDRIEVSKII SEA WEALTH family office in Cyprus, a member of the advisory board at Bendura Bank AG, Liechtenstein