Boliden was initially given the opportunity to acquire up to an 85% share in District Metals’ flagship asset, the Tomtebo site. After Boliden exercises its earn-in option, the Tomtebo asset and the Boliden-owned Stollberg asset will be rehoused in a new joint venture, with 15% of the joint venture going to District Metals (meaning District will keep a 15% ownership in both Tomtebo and Stollberg).
The Garpenberg mine, which is currently owned and run by Boliden, is located 50 kilometers west of the Stollberg project, which is only 35 kilometers from the Tomtebo asset. For numerous centuries, the Stollberg mineralized trend has been used for mining purposes. The most trustworthy information indicates that approximately 7 million tonnes of rock have been extracted from the Stollberg project.
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Boliden must spend a minimum of C$10 million on exploration of the Tomtebo and Stollberg assets by the end of October 2027 before it can exercise its option to earn its 85% ownership in the Tomtebo asset. District has stated that the Tomtebo project will require a minimum of C$3 million to safeguard its own interests. The aforementioned joint venture business will be established with Boliden as the majority owner (85%) and District Metals as the minority owner (15%) after the C$10M has been spent. The fact that District will serve as the operator during the C$10M earn-in phase is encouraging because it should result in operator fees of a few hundred thousand Canadian dollars annually, which will assist in defraying the administrative costs in Sweden.
This seems like a fair offer, particularly considering that District Metals has been building up a portfolio of uranium sites in Sweden in anticipation of the lifting of the current prohibition on uranium mining and exploration. This implies that Boliden will pay for the exploration costs on Tomtebo (and Stollberg), and District will be allowed to use its own funds for the uranium assets.
