The Sikavaara licences are positioned along the highly-prospective, east-west trending Sirkka shear zone, in the Central Lapland Greenstone Belt of Northern Finland. The Company has an Earn-In Agreement with Rupert Resources whereby Rupert can earn a 70% interest by spending ~$5 million on the project. The shear zone also hosts Rupert’s 4.09 Moz Ikkari gold deposit3 and B2 Gold and Aurion Gold’s joint Helmi and Sore gold discoveries. Valkea maintains a strong land-position along this structural trend with interests in the Sikavaara Project as well as its 100% owned Putaanperä Project.
Rupert has satisfied Stage 1 requirements and has met the minimum spend of approximately $1.65 million on exploration over the first three years of the Agreement. Rupert has elected to proceed to Stage 2 to earn a 70% interest in the Project by spending an additional $3.3 million CAD on exploration over the next three years. Rupert will continue to be the operator during the earn-in period and is responsible for meeting all requirements to maintain the Sikavaara licences in good standing. If Rupert does not meet the Stage 2 expenditure requirement, the Sikavaara licences will revert to 100% Valkea ownership. If Rupert completes Stage 2 of the earn-in, a total of €3.4 million (approximately $5.1 million CAD) across both licences would have been spent.
Following completion of Stage 2 expenditures a Joint Venture (70% Rupert, 30% Valkea) will be established. Rupert will be the operator whilst its participating interest in the joint venture is greater than 50%. Valkea can elect to contribute its pro rata share of joint venture expenditure or dilute. Should either party dilute to 10% or less (or if a party’s participating interest is less than 30% and it fails to contribute its pro rata share of funding on three occasions whilst its participating interest remains at less than 30%), that party’s interest will automatically convert to a 2% net smelter returns (NSR) royalty, with the other party having the right to buy down half of this royalty (1%) for €1 million (approximately $1.5 million CAD).