Under the letter of intent, Benjamin Hill will own a 20% interest in Aion, as well as an interest in a fully licensed Colombian coal project in Santander.
The total purchase price is $1.12 million. For this purpose, Benjamin will pay US$600,000 (CAD 822,301) in cash and issue US$525,000 in stock.
Once the shares are issued, the price per share “will be equal to the closing price of the company’s stock on the proposed closing date.”
In addition, the company has anti-dilution rights to maintain its 20% stake in Aion.
“Benjamin Hill is excited about the opportunity to work with the highly skilled Columbia Mining team to develop revenue-generating coal projects,” said Benjamin CEO Cole McClay.
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“There are strong signs that global demand for coal-fired equipment will remain strong as clean thermal technologies continue to emerge, with more than 70% of the world’s steel currently produced from coal.”
The coal resource includes eight known metallurgical and thermal coal seams derived from recent and historical diamond drilling programs and surface exposures.
Benjamin said they will continue to compile current and historical data on the property and collect extensive underground samples from various coal seams.
The exploration program will help the company better determine the grade and soil conditions of known coal seams.
Completion of the transaction is subject to various conditions, such as Benjamin’s due diligence on Aion.
However, Benjamin also pointed out that it is not certain whether the proposed transaction can be completed.