Canadian junior miner Explorex Resources (CSE:EX) (OTC:EXPXF) has placed in the back burn its plans to buy the Hautalampi cobalt, nickel, copper project in eastern Finland because it won’t be able to secure the required funding in advance, as it had planned.
The Vancouver-based miner, which in November said it intended to acquire the Finish asset, was supposed to give the project’s owner, FinnCobalt, around $1.9 million in cash plus $3 million value in shares of the company over a four-year staged period.
Explorex would have also have to spend $3 million in exploration before the second year. In addition, upon completion of the earn-in, FinnCobalt — made up of three private Finnish firms: Alandra Oy, Kiviralli Oy and Tetra Ekberg Oy — would have eceived a 1.5% net metals royalty. Once commercial production was declared at Hautalampi, the vendor would have received shares worth $1.5 million.
Explorex said it didn’t foresee sourcing adequate funds to move forward in a corporately prudent manner in the immediate term. However, it noted it was open proceed advancing the project on a non-exclusive basis.
“We recognize the merits of Hautalampi and will continue to pursue avenues to support the acquisition,” chief executive Gary Schellenber said in the statement.
The Hautalampi project was the focus for pre-production development in the mid-1980s and has seen extensive engineering that supported a feasibility study in 2009.
Currently, Explorex is focused on Kagoot Brook, a cobalt-manganese base metal project located in New Brunswick, Atlantic Canada. The junior also has a 100% interest in the early stage Handlebar cobalt-copper-nickel project northeast of Kamloops, British Columbia and is actively sourcing additional assets to increase its property portfolio.
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