Capella Provides Extension for Norway Asset Sale Closing

Rhea-AI Summary

Capella Minerals extends the long-stop date for asset sale agreement with Polar Transition Minerals AS, allowing for an IPO on Euronext Growth. The revised terms include an extension to July 7, 2024, and a minor adjustment in consideration received from Polar.

Market Analyst

The extension of the long-stop date for Capella Minerals Ltd's asset sale agreement with Polar Transition Metals AS is a strategic move that aligns with current market dynamics. The decision to accept an increased component of Polar shares indicates confidence in Polar's future performance, particularly post-IPO. This could signal to investors that there is potential for growth in the value of these shares, which would be distributed to Capella's shareholders. However, the shift from cash to shares as consideration also introduces a higher level of risk, as the actual value will be dependent on Polar's stock performance.

The focus on critical minerals for energy transition is timely, given the global push towards sustainable energy sources. Polar's positioning as a company dedicated to supplying these minerals could attract investors interested in ESG (Environmental, Social and Governance) and green energy trends. This sector is expected to see increased demand and companies like Polar could benefit from favorable market conditions. The IPO's success could also reflect positively on Capella, provided the market responds well to Polar's value proposition.

Mining Industry Analyst

Capella Minerals Ltd's engagement in the Norwegian copper assets and the revised terms of the asset sale agreement offer insights into the mining sector's response to evolving economic conditions. The commitment to cover ongoing project costs by Polar is a positive development for Capella, mitigating immediate financial outlays and enabling resource allocation to other strategic areas. The emphasis on local technical and management team development by Polar could enhance project execution and community relations, potentially leading to smoother operations and regulatory processes.

The technical information prepared in accordance with NI 43-101 and approved by a qualified person underlines the rigor and compliance with industry standards, which is critical for investor confidence. It is important for stakeholders to understand that NI 43-101 is a regulatory standard that ensures the transparency and scientific validity of public disclosures made by mining companies regarding mineral project assessments. Compliance with such standards can be seen as a marker of project credibility and management diligence.

Financial Analyst

The revised terms of the asset sale agreement, particularly the increase in equity consideration, reflect an adaptive approach to the prevailing market sentiment. For Capella's shareholders, the distribution of Polar shares provides a direct stake in the projects' outcomes. This can be a double-edged sword; the upside potential is coupled with the inherent volatility of a newly listed entity. Investors should consider the liquidity of Polar shares post-IPO and the company's potential market capitalization when evaluating the impact of this transaction on their portfolios.

The cash component of the deal, while reduced, offers immediate liquidity and could be used by Capella to fund other ventures or return value to shareholders. The balance between cash and equity in transaction considerations is a delicate one, influenced by the seller's need for liquidity versus the desire to participate in the buyer's future growth. In this case, the adjustment appears to reflect a strategic choice to lean into the latter.

VANCOUVER, BC, April 9, 2024 /PRNewswire/ - Capella Minerals Ltd (TSXV: CMIL) (OTCQB: CMILF) (FRA: N7D2) ("Capella" or the "Company") announces that the Company and Polar Transition Metals AS ("Polar"; formerly "NickelX AS") have mutually agreed on a 90-day extension of the long-stop date in order to close the asset sale agreement previously announced on October 17, 2023 (the "Agreement"). The amended long-stop date to close the Agreement is now July 7, 2024. This extension paves the way for the ongoing Initial Public Offering ("IPO") of Polar on Euronext Growth in Oslo, Norway.

Julien Balkany, Chairman of Polar Transition Minerals AS said: "We are pleased to be moving forward at full-speed with the IPO on Euronext Growth in Oslo and our objective is become the first publicly listed company in Norway exclusively focused on exploring, exploiting and supplying critical minerals essential for the energy transition. We are on track to complete the transaction with Capella in 2Q24. Polar Transition Minerals' aim is to contribute to the resurgence of a resilient mining industry in Norway while accelerating the pace of the energy transition and the supply of strategic metals in Europe." 

Revised Terms of the Asset Sale Agreement

Capella has agreed to extend the closing of the Agreement announced on October 17, 2023, to July 7, 2024. In recognition of current market conditions, Capella has also agreed to a minor adjustment in the consideration received from Polar by accepting an increased component of Polar shares upon completion of the IPO. As indicated previously, Capella intends to distribute all Polar shares received to its shareholders on a pro-rata basis. 

The revised Polar consideration is as follows:    

i)	Capella to receive CAD 2.5M in Polar shares upon closing of the IPO;
ii)	Capella to receive CAD 3.75M in cash upon closing of the IPO;
iii)	Polar to immediately cover ongoing costs directly related to the projects and with an approximate value of CAD 200,000.

All other terms and conditions of the Agreement remain unchanged.

Eric Roth, Capella's President and CEO, commented: "We will continue to support the Polar team in ensuring the success of their IPO on the Euronext Growth Exchange in Oslo, and with the advancement of the central Norway copper portfolio. Polar is building a strong local technical and management team and I am confident in their ability to drive the projects forward. I also believe that the increased consideration of Polar shares as part of the acquisition proceeds will directly benefit Capella shareholders by providing additional exposure to future success on the projects ".    

Qualified Persons and Disclosure Statement

The technical information in this news release relating to the Company's Norwegian copper assets has been prepared in accordance with Canadian regulatory requirements set out in NI 43-101, and approved by Eric Roth, the Company's President & CEO, a Director, and a Qualified Person under NI 43-101.  Mr. Roth holds a Ph.D. in Economic Geology from the University of Western Australia, is a Fellow of the Australian Institute of Mining and Metallurgy (AusIMM) and is a Fellow of the Society of Economic Geologists (SEG). Mr. Roth has 35 years of experience in international minerals exploration and mining project evaluation.

On Behalf of the Board of Capella Minerals Ltd.

"Eric Roth"
___________________________
Eric Roth, Ph.D., FAusIMM
President & CEO

About Capella Minerals Ltd

Capella is engaged in the acquisition, exploration, and development of quality mineral resource properties in favourable jurisdictions with a current focus on Scandinavian metals projects.

Capella continues to explore the Northern Finland Gold-Copper project in the Central Lapland Greenstone Belt, together with JV partner Cullen Resources Ltd (ASX: CUL). A total of six exploration permits have now been approved, including the priority and drill-ready Killero East gold-copper and Saattopora West gold-copper projects. In central Finland, the Company also continues to explore for lithium and rare-earth element deposits at its Perho project.

The Company entered in to a binding asset sale agreement with Polar Transition Metals AS on October 17, 2023, through which it will divest its 100% interests in the Hessjøgruva, Kjøli, and Lokken projects copper-zinc-cobalt projects in Trøndelag, central Norway. Polar currently holds 100% interests in four nickel exploration projects in northern Norway and is in the process of undertaking an Initial Public Offering ("IPO") on Oslo's Euronext Growth Exchange with the objective of becoming Norway's leading independent battery metals company. The transaction proceeds, payable upon completion of the IPO, includes Polar shares which Capella intends to distribute to its shareholders on a pro-rata basis. The Long-Stop Date for this agreement has been extended to July 7, 2024. 

Capella continues to evaluate strategic alternatives for its Joint Venture with Agnico Eagle Mines Ltd (TSX/NYSE: AEM) at the Domain Gold Project, Manitoba (Capella 29.6% interest), in addition to the Company's 49% interest in the Sierra Blanca Gold-Silver Project in Santa Cruz, Argentina, which is being explored by Austral Gold Ltd (TSXV: AGLD; ASX: AGD).

The Company is in the process of closing agreements on the Savant Gold Project (Ontario, Canada) and the Central Finland Lithium Project which will convert the Company's direct interests in these projects to significant shareholdings in Prospector Metals Corp. (TSX:V: PPP) and European Energy Metals Corp. (TSX.V: FIN), respectively. 

Cautionary Notes and Forward-looking Statements

This news release contains forward-looking information within the meaning of applicable securities legislation. Forward-looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. Such statements include, without limitation, statements regarding the future results of operations, performance and achievements of Capella, including the timing, completion of and results from the exploration and drill programs described in this release.  Although the Company believes that such statements are reasonable, it can give no assurances that such expectations will prove to be correct.  All such forward-looking information is based on certain assumptions and analyses made by Capella in light of their experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. This information, however, is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Important factors that could cause actual results to differ from this forward-looking information include those described under the heading "Risks and Uncertainties" in Capella's most recently filed MD&A. Capella does not intend, and expressly disclaims any obligation to, update or revise the forward-looking information contained in this news release, except as required by law. Readers are cautioned not to place undue reliance on forward-looking information.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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SOURCE Capella Minerals Limited

FAQ

What is the new long-stop date for the asset sale agreement between Capella Minerals and Polar Transition Minerals AS?

The new long-stop date for the asset sale agreement is July 7, 2024.

What exchange is Polar Transition Minerals AS planning to have an IPO on?

Polar Transition Minerals AS is planning to have an IPO on Euronext Growth in Oslo, Norway.

What is the revised consideration Capella Minerals will receive from Polar?

Capella Minerals will receive CAD 2.5M in Polar shares, CAD 3.75M in cash, and Polar will cover ongoing costs of approximately CAD 200,000 upon closing of the IPO.

Who is the President and CEO of Capella Minerals ?

The President and CEO of Capella Minerals is Eric Roth, Ph.D., FAusIMM.

What qualifications does Eric Roth, the President and CEO of Capella Minerals , hold?

Eric Roth holds a Ph.D. in Economic Geology, is a Fellow of the Australian Institute of Mining and Metallurgy (AusIMM), and is a Fellow of the Society of Economic Geologists (SEG).