Ormonde Mining PLC (AIM:ORM) told investors its investee company Peak Nickel Limited has entered an option agreement granting Winshear Gold Corp the right to acquire 100% of the 250km² Portsoy Project in Aberdeenshire, Scotland. The project includes the Rodburn Target.
Under the deal, Winshear must spend £3 million on the project within five years of TSX-V approval, with a minimum of £300,000 each year, and complete 1,000 metres of drilling with downhole electromagnetic surveying and metallurgical testwork. Winshear will also issue 6.5 million shares to Peak Nickel over the period and Peak Nickel will retain a 1% net smelter returns royalty capped at £10 million.
"While Ormonde did not support this transaction, as the board believes it undervalues the opportunity, we note the potential to realise value on the company's investment without further exposure to significant exploration costs in a challenging nickel market," said ORM chief executive Brendan McMorrow.
Ormonde retains an 18.9% interest in Peak Nickel.