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Maxim Power Corp. Receives Notice from Valory Resources Inc. to Exercise the Option to Purchase Summit Coal
CALGARY, Alberta, Feb. 11, 2025 (GLOBE NEWSWIRE) -- Maxim Power Corp. ("MAXIM" or the "Corporatio...
About this update from Maxim Power Corp.
[{"type":"text","content":"Maxim Power Corp. Receives Notice from Valory Resources Inc. to Exercise the Option to Purchase Summit Coal\n\n\n\n CALGARY, Alberta, Feb. 11, 2025 (GLOBE NEWSWIRE) -- Maxim Power Corp. (\"MAXIM\" or the \"Corporation\") (TSX: MXG) announces that, pursuant to the Option to Purchase Agreement entered into in February 2022, and subsequently amended and restated in March 2023, it has received notice (the “Notice”) from Valory Resources Inc. (“Valory”) that Valory is exercising its right to purchase the Corporation’s wholly-owned subsidiaries Summit Coal Limited Partnership and Summit Coal Inc. (collectively “Summit”). Following receipt of the Notice, MAXIM and Valory have until February 18, 2025 to enter into a Purchase and Sale Agreement (the “PSA”). Closing of the PSA (“Closing”) will be subject to each party satisfying customary closing conditions and is expected to occur in the first half of 2025.\n \n\n\n Purchase and Sale Agreement\n \n\n\n Under the terms of the PSA, Valory will pay a total purchase price of $14.2 million, consisting of $10.2 million cash and $4.0 million of equity securities in the form of either (i) common shares of Valory, or (ii) an interest-bearing note convertible into Valory common shares, at MAXIM’s election, prior to Closing. Summit will be sold with $2.2 million of restricted cash, resulting in net cash proceeds to MAXIM of $8.0 million.\n \n\n Summit sale proceeds will be used by MAXIM for general corporate purposes.\n \n\n Following signing, a copy of the PSA will be available under the Corporation's SEDAR+ profile at\n \n www.sedarplus.ca\n \n .\n \n\n\n Royalty Agreement\n \n\n\n Prior to Closing, MAXIM and Summit will enter into an agreement such that MAXIM will receive a 3% royalty on any raw coal volume produced from the coal leases currently owned by Summit, including any volumes from Summit’s Mine 14 project. The royalty will be calculated using a Premium Low Vol Hard Coking Coal benchmark and will be paid in United States dollars. The amount and timing of any royalty payments is contingent on the commencement of production and there is no certainty as to if, or when, production may begin.\n \n\n\n Ground Lease\n \n\n\n MAXIM, through its wholly-owned subsidiary, Milner Power Inc. (“Milner...