Good news on way for NLI !!!!, page-498

Hi Kiwigeo87,

I’m a long time lurker on this page, but thought I might be of some assistance re your query.

As an Australian lawyer with experience in the resources sector, the structure which you have described is pretty standard for exploration projects worldwide. It’s typically called an “earn-in” or “farm-in”, which essentially means that if the prospective buyer spends up to certain pre-agreed amounts on certain pre-agreed categories of expenditure on a tenement (i.e. certain metres of drilling in specified areas), they subsequently earn a right to call on progressively higher percentages of equity in the target company / tenement (i.e. there is a tiered “earn-in”, culminating in 100% after phase 4).

The above process can obviously be frustrated if the vendor doesn’t follow through with their agreement, which allegedly is the case here.

Unfortunately, there isn’t much that we can do but wait at this stage, as it’s impossible to know the terms of NLI’s specific contract with Luso. However, you can take comfort knowing that the overall structure of the deal isn’t out of the ordinary.

DYOR