Critical One Energy said on October 29 it has signed a binding memorandum of understanding with Solar International Core Canada, a strategic investment firm whose partnerships include the Sultanate of Oman sovereign wealth fund. The package totals 425 million Canadian dollars: 25 million of strategic capital and a construction financing facility of up to 400 million, tied to the Howells Lake antimony gold project in northwestern Ontario.
The equity piece is priced at a premium. SICC will buy 12.5 million shares at 1.20 Canadian dollars, a 48 percent premium to the October 28 close of 0.81 dollars, for 15 million dollars and a 12 percent fully diluted interest, with a 12 month voluntary lock up and no warrants. A further 10 million funds Critical One’s carried equity interest in a planned Ontario antimony processing facility to be developed by Northlink Development Group.
Offtake is the strategic element. SICC gains exclusive rights to buy up to 150 million pounds of future antimony production from Howells Lake at international benchmark prices, integrating the project’s feedstock with the Ontario processing plant. SICC has 90 days to deliver an indicative term sheet for the construction facility, and equity completion remains subject to 90 day due diligence and Canadian Securities Exchange acceptance.
The caveats are material and stated by the company itself. Howells Lake, about 120 kilometres west of the Ring of Fire access corridor in the homelands of the Eabametoong First Nation, does not currently have an NI 43-101 compliant resource, and future production is not guaranteed. A funded 20,000 metre programme is designed to produce a maiden resource. The MOU therefore buys an option on a supply chain, priced at a premium, before the resource that would fill it has been defined.