Usha Resources Ltd (TSXV: USHA; OTCQB: USHAF; FRA: JO0) has invited its shareholders to attend an extraordinary general meeting on December 16, 2022. The meeting will decide on the separation of the nickel assets from the lithium and gold properties owned by Usha. Going forward, Usha intends to focus on its U.S.-based assets, including the Jackpot Lake lithium brine project. The advanced Nicobat nickel project in Ontario is to move to spin-out company Formation Metals. The Company's Board of Directors recommends that the Company's shareholders vote in favor of this arrangement.
Usha shareholders will be offered to receive one (1) FMI share for every five (5) Usha shares held by way of a share exchange. The number of Usha common shares will remain the same as on the record date of the share distribution. Upon completion of the Arrangement, FMI will hold the Company's interest in the Nicobat Nickel Project and focus on advancing that project. Subject to the necessary approvals and completion of the Arrangement, FMI is expected to add new exploration stage projects to its portfolio over time. USHA will maintain its exploration projects in the U.S. and focus on advancing them, including the Jackpot Lake lithium brine project, where the company will begin drilling next week.
The Nicobat nickel property is a nickel-copper PGE project located in the community of Dobie in northwestern Ontario, 21 kilometers south of New Gold's Rainy River mine, where the Zone 34 nickel discovery is located.
Historical exploration work between 1952 and 1972 included over 15,000 meters of drilling, 220 drill holes and numerous bulk samples that identified a non-conformable historical resource of 5.3 million tonnes grading 0.24% Ni, which included a high grade zone of approximately 225,000 tonnes grading 0.87% Ni.
Recent exploration work includes drilling over 4,000 meters which confirmed that high grade nickel-copper outcrops exist and are significantly better than historical drilling. Hole A-04-15 intersected a weighted average of 1.05% nickel and 2.18% copper from surface to approximately 63.75 meters, including an approximately 9.8 meter interval of 1.92% Ni from 53.95 to 63.75 meters.
CONCLUSION: The spin-off of the nickel property from Usha Resources is consistent, as right now 100% of the focus is on exploration at the Jackpot Lake lithium brine project in Nevada, which was only acquired in March of this year. Resource drilling there is expected to commence shortly. For the nickel project in Ontario, Usha is not getting any recognition from the stock market, despite notable results. Therefore, most shareholders will welcome receiving an additional 2,000 shares in the spin-out company Formation Metals for, say, 10,000 Usha shares. It will be important for Formation Metals to have its own management team as quickly as possible, with its own focus and the ability to raise capital.
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