Cornwall Resources Ltd could be in line for an injection of several million pounds for the Redmoor project after its parent company agreed a tentative deal to sell its Australian assets.
LISTING
Strategic Minerals plc signed a non-binding heads of agreement with Axis Mining & Minerals Pty Ltd to sell its Australia subsidiary which owns the Leigh Creek copper project in South Australia.
Axis will pay a non-refundable A$100,000 within 30 days from 23 April for an exclusive call option to acquire 100% of Leigh Creek Copper Mine Pty Ltd.
The potential purchaser has six months, or longer if agreed, to acquire Leigh Creek for an initial A$1.9 million (£900,000) cash.
Axis expects to complete a listing in Australia after which it will issue Strategic Minerals with shares equivalent to 19.9% up to a maximum value of A$3m (£1.4m).
Axis will also pay an “earn-out” to Strategic Minerals, equivalent to A$4m (£1.9m) on a half yearly basis from the start of the project’s commercial production.
Strategic Minerals’ executive director Mark Burnett said: “The sale of Leigh Creek, if completed, would deliver total consideration of up to A$9 million [£4.3m] from a non-core asset and mark a further step in concentrating our focus on the accelerated development of the high-grade Redmoor tungsten-tin-copper project in Cornwall.
“We look forward to working with the purchaser towards its objective of exercising the call option.”