Falco Announces Execution of Operating License and Indemnity Agreement With Glencore Canada Corporation
2024-01-24 08:00 ET - News Release
MONTREAL, Jan. 24, 2024 (GLOBE NEWSWIRE) -- Falco Resources Ltd. (TSX.V: FPC) (“Falco” or the “Corporation”) is pleased to announce that it has entered into an operating license and indemnity agreement (the “OLIA”) with Glencore Canada Corporation (“Glencore”) pursuant to which Glencore granted to Falco, subject to the terms and conditions contained in the OLIA, a license to utilize a portion of its lands, which Falco will use to develop and operate Falco’s wholly-owned Horne 5 project located in Rouyn-Noranda (Québec) (the “Horne 5Project”).
OLIA Framework
The OLIA was entered into further to the preliminary agreement in principle with Glencore (the “Agreement in Principle”) announced on June 28, 2021. The OLIA establishes the framework to govern Falco’s development and operation of its world-class Horne 5 Project, taking into account its overlap with and close proximity to Glencore’s copper smelting operations at the Horne smelter in Rouyn-Noranda (the “Horne Smelter”).
The key features of the OLIA include:
- The creation of a Technical Committee comprised of two representatives of each of Falco and Glencore, to determine ongoing operating parameters within which Falco can conduct operations of the Horne 5 Project so as not to interfere with the Horne Smelter, minimize and control risks to the Horne Smelter and where necessary adopt mitigation measures.
- The creation of a Strategic Committee comprised of two representatives of each of Falco and Glencore, to collaborate and exchange information in connection with the development and operation of the Horne 5 Project, its interaction with the Horne Smelter and community and regulatory matters, and to capitalize on the many synergies between the parties.
- The right of Glencore to appoint one nominee to Falco’s board of directors.
- The adoption of principles pursuant to which Glencore and its Horne Smelter (i) retain priority over the operations of the Horne 5 Project as contemplated in the OLIA and (ii) must be afforded protection from incremental risks and losses occasioned by Falco’s Horne 5 Project.
- Financial assurances, guarantees and indemnification to be provided by Falco to Glencore to cover incremental risks and losses to Glencore and its Horne Smelter arising from Falco’s operations and certain other matters specified in the OLIA.
- The right of Glencore to require remediation, suspension or other risk-mitigation during the operations of Falco’s Horne 5 Project to protect Glencore’s Horne Smelter and related operations, subject to expert intervention and dispute resolution mechanisms set out in the OLIA.
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