In March 2014 a transaction was entered into with Energizer Resources Inc. to rationalise the Molo Graphite Joint Venture. The decision was made to crystallise significant value for Malagasy and to allow the company to focus on gaining further exposure to high quality graphite deposits on the company’s highly prospective 100% owned tenements at the Maniry Project. In addition to this 100% owned graphite opportunity, Malagasy will continue to advance its core focus of exploring for world-class nickel-copper-PGM deposits across the wider project area.
The core components of the Sale and Purchase Agreement (“SAP”) between the companies are:
On execution of the Sale and Purchase Agreement Energizer will;
- Pay Malagasy the sum of C$400,000 cash;
- Issue 2,500,000 EGZ shares (held in escrow for 12 months); and
- Issue 3,500,000 EGZ warrants (based on a 5 day VWAP prior to date of signing).
On completion of a Bankable Feasibility Study (“BFS”) Energizer will:
- Pay Malagasy the sum of C$700,000 cash; and
- Issue 1,000,000 EGZ shares.
On the commencement of commercial production Energizer will:
- Pay Malagasy the sum of C$1,000,000 cash; and
- Commence payment of a 1.5% Net Smelter Return (“NSR”) on all production.