Business
Zentek and 1329307 BC Ltd. Sign Letter of Intent to Spin Out Albany Graphite Deposit
GUELPH, ON / ACCESSWIRE / February 15, 2023 / Zentek Ltd. (" Zentek ") (NASDAQ:ZTEK)(TSX-V:ZEN),...
About this update from Zentek Ltd.
[{"type":"text","content":"Zentek and 1329307 BC Ltd. Sign Letter of Intent to Spin Out Albany Graphite DepositGUELPH, ON / ACCESSWIRE / February 15, 2023 / Zentek Ltd. (\"Zentek\") (NASDAQ:ZTEK)(TSX-V:ZEN), an intellectual property development and commercialization company, and 1329307 BC Ltd. are pleased to announce that they have signed a non-binding letter of intent dated February 13, 2023 (the \"LOI\"), pursuant to which the parties have agreed to negotiate a transaction (the \"Transaction\") involving the transfer of Zentek's Albany Graphite Deposit in northern Ontario to an entity (\"SpinCo\") to be listed on a recognized Canadian stock exchange. The definitive structure of the Transaction will be determined following consultation with tax, securities and corporate advisors, provided that the parties currently intend that, following completion of the Transaction, Zentek shall retain a majority direct equity interest in SpinCo.Zentek believes that transferring the Albany Graphite Deposit asset to a separate entity will enable the Albany Graphite project to move forward with the second year of environmental baseline and hydrogeology studies, with the aim to eventually complete a prefeasibility study. Management of Zentek believes that Zentek's current share price does not fully recognize the value of the Albany Graphite Deposit, and that, by completing the Transaction, Zentek, and accordingly its shareholders, will benefit from realizing the value of the asset.\"With significant production shortfalls anticipated in the next decade, and the limited number of producing mines and graphite deposits in geopolitically stable countries, the importance of North American graphite and our Albany Deposit is growing by the day,\" said Greg Fenton, CEO of Zentek. \"Amidst this backdrop, we believe our strategy of using a separate entity to move Albany forward and pursuing funding directly for it gives us a compelling pathway to help unlock the value of our wholly-owned deposit for shareholders in the near and longer term.\"The LOI was approved by the board of directors of each of Zentek and 1329307 BC Ltd. If and when a definitive binding agreement to consummate the Transaction is executed, Zentek and 1329307 BC Ltd. will issue a subsequent news release containing the details of the definitive agreement and other matters of material significance. While each of Ze...