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Searchlight Resources Signs Letter Of Intent

Searchlight Resources Signs Letter Of Intent
Written by
Marc Zerbola Challande
Marc Zerbola Challande
Published on
February 8, 2023
Read time
4
 min read

Searchlight Resources (TSXV: SCLT, OTC: SCLTF, FRA: 2CC2), an exploration company focused on the prolific province of Saskatchewan optioned Jan Lake claims to Brunswick Exploration. This transaction grants many benefits to the company as it will receive cash, shares, and NSR, which can be bought out for a significant amount. 

Company Overview

Searchlight Resources (TSXV: SCLT, OTC: SCLTF, FRA: 2CC2) is a Canadian mineral exploration, and development company focused on Saskatchewan, Canada. Throughout its 130 Km2 ownership of claims, the company focuses on gold, uranium, and battery minerals. Searchlight Resources is entirely focused on the Saskatchewan province, which was considered Canada’s top province jurisdiction for mining investment in 2021, according to the Fraser Institute. The province is mining-friendly, and even better, it develops Canada’s first rare earth processing facility at the Saskatchewan facility. Thanks to the worldwide transition toward clean technologies to achieve global decarbonization, the province appears to be a solid supplier of commodities.

News Release overview

The company signed a Letter of Intent to option Jan Lake claims to Brunswick Exploration (TSXV: BRW), an early-stage exploration company looking for metals needed for decarbonization and the transition to renewable energy. The claims are about 60 km west of Flin Flon, Manitoba, and Creighton, Saskatchewan. They include 148.6 square kilometers as well as Searchlight's 50% share of the 12.4 square kilometers of Hanson Lake property. Anomalous Rare Metals such as Beryllium, Rubidium, Gallium, Tantalum, Cesium, and Lithium were found in positive historical samples.

“Searchlight is pleased to sign a deal with Brunswick, a premier lithium exploration company focused on exploring in Canada using state-of-the-art exploration techniques”, said Stephen Wallace, Searchlight’s CEO. 

Searchlight explores Saskatchewan's whole potential

To acquire these claims, Brunswick Exploration will have to fulfill several duties over four years, bringing cash to Searchlight Resources and work on the claims: 

-$35,000 in cash or shares, or a combination of both at Brunswick’s option on signing; 

- $700,000 in cash, shares, or a combination of both, at Brunswick’s option, subject to a minimum 25% in cash, over a four-year period; 

- $1,000,000 work commitment* over four years; 

- $250,000 in cash, shares, or a combination of both at Brunswick’s option upon the filing of a resource estimate**; 

- $250,000 in cash, shares, or a combination of both at Brunswick’s option on the filing of a Preliminary Economic Assessment ***. 

-2% Net Smelter Royalty, half of which may be purchased for $1,000,000, and the other half for $2,000,000. 

-Brunswick will be the operator of exploration programs on the optioned properties. 

Map 1. Location of Searchlight’s Jan Lake and Hanson Lake Claims in Saskatchewan

Share Structure/ Financials

 

Regarding the company’s last financial statements (for the three months ending September 30), the company had +2M in cash, almost $3M in total assets, for no debt. Searchlight has low expenses as it only spent $333k for the last trimester, with $176k for mineral exploration costs. The company had 132M shares outstanding, 10.7M options (avg. price: $0.07), and 38.2M warrants (avg. price: $0.09), leading to a fully diluted structure of 181.4M shares. The stock is traded at $0.05 (February 1st, 2022) and sits at its 52-week low, delivering a significant upside. 

Bottom Line

While exploring other areas of Saskatchewan, Searchlight Resources (TSXV: SCLT, OTC: SCLTF, FRA: 2CC2) managed to sign an LOI that will provide cash and indirect revenue thanks to shares issued by Brunswick Exploration and an NSR. If you need further information, contact Alfred Stewart by phone number or email (info@searchlightresources.com).

*A Net Smelter Return (NSR) is the net revenue, less transportation and refining expenses, that the owner of a mining property receives from the sale of the mine's metal and non-metal products. A mine operator is required to pay the owner of the royalty agreement a portion of the net smelter return, which is referred to as a royalty.

**A Resource Estimate, also known as tonnage and estimated economic value, is an estimation of an ore deposit's quantity and quality based on its resource and reserve status. It can be done at the beginning to evaluate the mineral resources, as well as throughout the mining process to determine the remaining ore reserves.

*** A Preliminary Economic Assessment aims to answer the query, "How best can this deposit be exploited to maximize its economic returns?" In contrast to more sophisticated studies, a PEA can use inferred resources for its operational and financial modeling as long as one has a reasonable expectation that the result will be a profitable mine. A PFS and, if using debt financing, an FFS typically come after a PEA. Due to the greater level of unknowable risks, costs, and timelines, a PEA rarely serves as the foundation for a production decision.

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