Junior miner American Potash Corp., Vancouver, on April 17 announced that it has signed a new option agreement with LiK Resources LLC, a private Houston-based exploration company, on its Green River Potash and Lithium Project in the Paradox Basin, Utah (GM Dec. 16, 2022). The agreement replaced a previous option agreement entered into by the company and LiK on Dec. 17, 2021.
To earn a 70% interest in the project, LiK will need to make cash payments of US$150,000; advance $3 million to the company by April 28, to be used exclusively for permitting and drilling the first exploratory well under the supervision of a mutually agreed upon top-tier industry consultant; and complete two separate pre-feasibility studies, one for lithium and one for potash, evaluating a minimum of six mineral leases or claims within the project by Dec. 31, 2024.
LiK will also be required to commission a valuation of the project by an independent, mutually agreed upon third-party, to be delivered 90 days from the completion date of the pre-feasibility studies. LiK will be required to transfer $1 million in common shares to the company within 45 days of completion of the studies and valuation of the project if LiK is a publicly traded company with a market capitalization of more than $100 million.
The option agreement applies only to the company’s 11 State of Utah mineral leases and 128 federal placer mining claims and excludes areas subject to the potash permit applications that are currently under final review by the Bureau of Land Management.