Metals Creek Resources Corp. (TSXV: MEK) and Benton Resources Inc. (TSXV: BEX) have signed an option agreement dated November 5, 2026, granting Brutus Mining Inc. the right to acquire a 100% interest in the Bay of Islands Project in Western Newfoundland. The property, covering 334 claim units across 83.5 square kilometres, is considered prospective for natural hydrogen. The deal introduces a staged cash and share payment structure, with a gross metals returns royalty retained by the optionors upon full exercise.

Key Points

  • Metals Creek Resources Corp. (TSXV: MEK) and Benton Resources Inc. (TSXV: BEX) are joint optionors in this transaction
  • Brutus Mining Inc. has been granted an option to acquire 100% of the Bay of Islands Project in Western Newfoundland
  • Total consideration includes $100,000 in cash and 1,200,000 common shares at a deemed price of $0.76 per share, paid in tranches over two years
  • Investors may be watching for CSE acceptance of the agreement and Brutus Mining's planned 2027 soil-gas survey and seismic mapping work

Bay of Islands Option Terms and Royalty Structure

Under the agreement, Brutus Mining will pay the optionors an aggregate of $100,000 in cash: $20,000 within 10 business days of November 5, 2026, followed by $30,000 and $50,000 on or before the first and second anniversaries of the effective date. Additionally, 1,200,000 common shares at a deemed price of $0.76 per share will be issued in three tranches of 200,000, 400,000, and 600,000 shares respectively. Upon full exercise, the optionors retain a 3% Gross Metals Returns royalty, with 1.5% redeemable for a $1,000,000 payment. The agreement remains subject to acceptance by the Canadian Securities Exchange.

Western Newfoundland's Emerging Natural Hydrogen Prospectivity

The release states that Atlantic Canada is emerging as a highly prospective area for hydrogen exploration, with Western Newfoundland attracting increased project generation. The Bay of Islands Project sits in geological settings noted in published scientific literature as potentially favourable for natural hydrogen. A 2024 Quebec study referenced in the announcement cited the Bay of Islands ophiolite complex as a key area of interest, while a 1985 Tectonophysics article described ophiolite formations in the region as having formed within the early Paleozoic Iapetus Ocean, lending geological context to the natural hydrogen thesis.

Planned Exploration and Project Work at Bay of Islands

The release states that the project will be evaluated through a compilation of public geoscience data and structural interpretation, leading to a proposed soil-gas survey and seismic mapping program during the 2027 field season. The project area encompasses portions of the Parson's Pond Basin and Deer Lake Basin, described in the announcement as interpreted to be prospective for both hydrogen and helium. The presence of chrome, serpentine, associated groundwater, and regional fault structures are cited as factors providing potential mechanisms for hydrogen generation and migration.

Share Resale Restrictions and Compliance Conditions

The shares issued under the agreement carry contractual resale restrictions beyond any hold periods required under applicable securities laws. First and second tranche shares are subject to a 36-month contractual restriction from issuance, with the exception of 100,000 shares from each tranche. Third tranche shares carry a 12-month contractual restriction from issuance. Brutus Mining may accelerate any cash payment or share issuance at its election. The immediate share price impact on MEK or BEX was not clear from available public information.