Aurumin has announced that it has executed a binding term sheet with Polaris Metals, a subsidiary of Mineral Resources, for the sale of the iron ore rights on four of Aurumin’s Mt Dimer exploration tenements.
The Mt Dimer exploration tenements are located approximately 120km north-east of Southern Cross, and proximal to MinRes’ Carina iron ore mine.
Cash consideration of $250,000 is payable to Aurumin on satisfaction of the Conditions Precedent. A progress payment of $250,000 is also payable upon granting of the first programme of works.
Other progress payments up to a total of $1 million are payable on decision to mine, approvals to mine and mining. Aurumin will also receive a $1.00/t royalty on iron ore exported.
The Conditions Precedent involves granting of the exploration licences and obtaining all necessary regulatory, statutory or other approvals to effect the transaction.
As part of the agreement MinRes is expected to provide reimbursement for tenement outgoings. Expenditure by MinRes is expected to be no less than the minimum expenditure obligations for the tenements.
Aurumin will conduct MinRes-approved exploration activity and receive a management fee.
The remaining conditions precedent are to be satisfied within 12 months from execution of the term sheet (or such later date agreed between the parties) and are all in progress with no objections to the grant of the tenements.
Aurumin has cautioned investors that whilst the term sheet is binding, it is still conditional on the conditions precedent and, if any conditions precedent are not satisfied or waived, then completion will not occur.
The term sheet contains terms and conditions considered standard for an agreement of this nature. If the Convertible Note held by Collins Street Asset Management has not been retired at completion, funds received from the sale of the iron ore rights will be used to reduce the outstanding balance of the Convertible Note.
Sale of iron ore rights:
- Exploration licence E77/2662
- Exploration licence applications E77/2974, E77/2983 and E77/2985
Aurumin’s Managing Director, Brad Valiukas, said that the company is pleased to have executed the agreement with MinRes and that this agreement allows Aurumin to unlock further value from Mt Dimer.
“It complements the sale of the Mining Tenements to Beacon Minerals, and will allow further reduction of the Convertible Note,” Mr Valiukas said.
“We maintain upside from both progress payments and future production and look forward to working with MinRes on the exploration programme.”
