Ascent Resources plc and its partner could receive additional cash flows ar their existing Paradox Basin oil and gas wells and leases from a second partnership exploring for metals and minerals at the 119,000 acreage in Utah, USA.
TERMS
The company and American Helium LLC signed a 60-day exclusive option agreement with Neometals Ltd and its partner Omaha Value, LLC (NMT/OMA) who could potentially extract lithium and potash from mineral-rich brines.
Ascent holds 49% and American Helium 51% of the helium-rich oil and gas licences, which extend into Colorado.
Ascent said it would not need to pay any upfront drilling or development costs for NMT/OMA to gain access to “deep, artesian brines previously intersected during historic oil, gas and helium exploration”.
Under the agreement, the partners would receive an exclusivity fee of US$50,000 and a further $50,000 on exercise of the option.
A permitting fee of $1.9 million is payable on grant of relevant mineral leases, and pro-rated if fewer wells are available.
An annual licence fee of $200,000 will be payable, in arrears.
The partners would also receive royalty on future brine production of 2.5% of gross revenue.
The figure increases to 3.5% if commercial extraction does not start within five years of the grant of a mineral lease.