Generation Mining Ltd. has agreed to sell its rights and interests in an option agreement to acquire its interest in six mineral leases known as the Davidson Property, which hosts a molybdenum-tungsten deposit, located near the town of Smithers, British Columbia, to Moon River Capital Ltd. Gen Mining will receive from Moon River, a capital pool company listed on the TSX Venture Exchange, $630,000 in cash, 9 million common shares of Moon River and certain nomination and pre-emptive shareholder rights.
“The Davidson Property deserves additional attention and resources in this robust market for both molybdenum and tungsten,” said Paul Murphy, independent lead director for Gen Mining. “Ian McDonald, interim CEO and a director of Moon River, is the former executive chairman and CEO of Thompson Creek Metals Co. Inc., which was focused on molybdenum production and was previously involved with the property.”
The Davidson molybdenum deposit has more than 90 million metric tons (mt) grading 0.286% molybdenum sulphide (MoS2) and 0.034% tungsten trioxide (WO3) at a 0.2% MoS2 cut-off (or 340.5 million lb Mo and 67.53 million lb WO3).
The transaction is subject to customary closing conditions and is expected to be completed by the end of October. Following the closing of the transaction, Gen Mining is expected to hold between 29% and 31% of Moon River. It will also have the right to appoint a director to the board of Moon River and will have pre-emptive shareholder rights for as long as it continues to hold more than 10% of Moon River’s common shares.
