Buru Energy Ltd has accepted an offer from Sipa Resources Ltd to sell its 50% share in the Barbwire Terrace Base Metal Project, in return for a 0.6% net smelter royalty.
Buru’s wholly owned subsidiary Battmin Pty Ltd entered into a sale and purchase agreement with Sipa, to sell its interest in the two granted tenements E04/2674 and E04/2684.
The transaction was completed yesterday on January 23, with Sipa assuming 100% ownership of the tenements.
Monetising non-core assets
“This transaction with Sipa reflects Buru’s strategy to divest and monetise its non-core assets as announced late last year, to enable Buru to focus its activities and capital on the development of the Rafael Project,” Buru Energy CEO Thomas Nador said.
“I thank Sipa’s management for its role and efforts in operating the Barbwire Terrace Base Metal Project in joint venture with us since 2021 and wish them further exploration and commercialisation success.”
As consideration for the Barbwire Terrace tenements, Sipa has granted Buru (through Battmin) a royalty for the tenements.
The rate of royalty is 0.6% of the net smelter return from future production, based on standard industry terms that would allow Sipa to buy the royalty back for a one-off payment of $600,000.
The smelter royalty allows Buru to retain exposure to any production success Sipa achieves at the Barbwire Terrace Project without any additional capital expenditure.
The sale also frees up resources to focus on the Rafael project, where Buru is concentrating all of its resources.
“As the only proven conventional gas and liquids resource in the greater Kimberley region, developing Rafael is a unique opportunity for the company to build a foundation energy business to supply an established and growing regional energy market,” Nador said in the company’s quarterly report.
Read: Buru Energy has clear focus to develop 100%-owned Rafael Project