Rincon Resources has signed a binding heads of agreement to sell 90% of its interest in Lyza Mining, which holds the West Arunta Project tenements, to Maverick Minerals Australia.
Following completion of the transaction, Rincon will maintain a 10% interest in the project through a joint venture (JV) arrangement and will be free-carried until a decision to mine is made.
The deal includes an upfront payment of A$600,000 ($413,615), consisting of A$100,000 in cash and A$500,000 in Maverick shares, subject to a six-month escrow period.
In addition, deferred consideration of A$500,000 will be payable in Maverick shares in two tranches.
The first A$250,000 is due following the completion of an initial drilling programme, with a further A$250,000 to be paid after completion of a secondary programme at the West Arunta Project.
Under the agreement, if the JV does not begin an initial programme within 24 months of completion or complete the secondary programme within 36 months, Rincon may buy back shares in Lyza Mining for A$1.
This would reduce Maverick’s interest in the project to 25%.
The JV would then continue with Rincon holding a 75% interest and Maverick maintaining a 25% free-carried interest.
The issue price for the shares is set at A$0.015 each and is subject to approval from Maverick shareholders.
Completion of the deal is also contingent upon customary conditions precedent, with finalisation expected within two months once those conditions are met or waived.
Rincon technical director Michael Griffiths said: “This transaction represents an attractive outcome for the company, securing cash and equity consideration while retaining a 10% free-carried interest in the West Arunta Project.
“The structure enables shareholders to benefit from future exploration success, whilst significantly reducing the company’s funding requirements. This partial divestment paves the way for Rincon to dedicate further funds towards its Telfer South Gold-Copper Project.”
Rincon holds full ownership of three exploration projects in Western Australia (WA) that are considered prospective for copper and gold.
These are the South Telfer Project, the Crackerbox Gold Project in the Murchison Gold Field and the West Arunta Project.
“Rincon Resources to sell 90% of Lyza Mining to Maverick” was originally created and published by Mining Technology, a GlobalData owned brand.
