TSX-listed Deep-South Resources and Teck Namibia, a wholly owned subsidiary of Teck Resources, have agreed to amend the sale agreement of February 2017, whereby Deep-South acquired Teck’s interest in the Haib Copper project, in Namibia.
The sale agreement stipulated that Deep-South make cash payments to Teck Namibia of $200 000 on the first anniversary of the agreement and $200 000 on the second anniversary of the agreement.
Deep-South has completed cash payments of $30 000 but $370 000 is outstanding and past due.
Teck has agreed to settle this amount through the issuance of shares in Deep-South.
The shares issued pursuant to the settlement has a mandatory four-month holding period from the date of closing.
Following closing, Teck will hold 26.9% of the share capital of Deep-South on an undiluted basis.
Moreover, Teck holds a convertible debenture with a principal value of $389 117 and convertible at $0.14 with a maturity date on August 31.
The parties have agreed to amend the convertible debenture and extend the maturity to December 31, 2021 at a new conversion price of $0.09.
The transaction is subject to the approval of the TSX Venture Exchange.