en.Wedoany.com Reported - Australian mining company Rincon Resources has signed a binding term sheet to sell a 90% interest in Lyza Mining, which holds the mining rights for the West Arunta Project, to Maverick Minerals Australia.
Upon completion of the transaction, Rincon will retain a 10% interest in the project through a joint venture arrangement and will enjoy a free-carried interest until a mining decision is made.
The consideration includes an upfront payment of A$600,000 (approximately US$413,615), of which A$100,000 will be paid in cash and A$500,000 in Maverick shares, subject to a six-month lock-up period.
An additional deferred consideration of A$500,000 will be paid in Maverick shares in two tranches: the first tranche of A$250,000 upon completion of the initial drilling program, and the second tranche of A$250,000 upon completion of the second phase program for the West Arunta Project.
Under the terms of the agreement, if the joint venture fails to commence the initial program within 24 months or complete the second phase program within 36 months after the transaction closes, Rincon may repurchase the shares of Lyza Mining for A$1.
At that point, Maverick's interest in the project will be reduced to 25%, with the joint venture continuing operations, Rincon holding a 75% interest, and Maverick retaining a 25% free-carried interest.
The issue price of the shares is set at A$0.015 per share, subject to approval by Maverick shareholders. The completion of the transaction is also subject to customary conditions precedent and is expected to be finalized within two months after the conditions are satisfied or waived.
Rincon Technical Director Michael Griffiths stated that the deal brings cash and equity consideration to the company while retaining a 10% free-carried interest in the West Arunta Project, allowing shareholders to benefit from future exploration success while significantly reducing the company's funding requirements. This partial divestment paves the way for Rincon to allocate more capital to its Telfer South gold-copper project.
Rincon wholly owns three exploration projects in Western Australia, which are considered prospective for copper and gold, including the South Telfer Project, the Crackerbox gold project in the Murchison goldfield, and the West Arunta Project.
