Dominion Water Reserves (CSE: DWR) this morning announced that it has entered a letter of intent to secure further water sources within the Province of Quebec as of this morning. The LOI, dated as of today, is for a silicium water source known as the St-Joseph de Coleraine, along with a twenty five year water sales contract with that of Aquanord.
The proposed transaction would see Dominion Waster purchase a wholly owned subsidiary of Aquanord Inc, whom currently owns a 100% interest in the unique water source. The source is unique in that it features 13 ppm silicon content, which is a unique water quality that is expected to prove attractive to specialty water markets, while having annual permitted extraction volumes opf approximately 71 million litres per year, or roughly 0.7% of the total volume under permit within Quebec.
The natural silicon is considered to “exhibit natural health, strength and regeneration properties.” The element, which is the third most abundant within the human body, is an important component of health. Silicon is crucial to bone structure, the brain, and the nervous system within the body, making the high natural content found within the water source desirable to these specialty bottlers.
Under the terms of the letter of intent, Dominion Water is to acquire 11973002 Canada Inc in exchange for 714,286 common shares of Dominion at a price of $0.35 per share, in addition to $400,000 in cash for an aggregate purchase price of $650,000. Cash payments are to consist of $150,000 on or before September 1, 2020, $150,00 on or before September 30, 2020 and $100,00 on or before October 30, 2020.
As part of the transaction, Dominion Water will also secure a 25 year water sales contract to Aquanord, the current parent company of 11973002 Canada Inc. While total annual volumes were not specified, the currently proposed pricing consists of $0.005 per litre for the first 5 years, $0.01 per litre for the following 5 years, $0.015 for the 5 year period that follows, and then $0.02 per litre for the final 10 years of the contract.
The agreement is currently subject to the execution of a definitive agreement.
Dominion Water Reserves last traded at $0.19 on the CSE.
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