European Lithium (ASX:EUR) has taken a further step towards finalisation of the sale of its Paynes Find Gold Project to Cervantes Gold Pty (ASX:CVS) with both companies signing the formal sale agreement.
Significantly, the company can expect up to $450,000 of cash payments over the next few months.
Consideration for the transaction consists of cash and share capital in CVS as follows:
- $500,000 to be satisfied through the issue of 25 million shares in CVS, at a deemed issue price of $0.02 on completion of the transaction; and
- $500,000 in cash paid in instalments.
$50,000 of the cash instalments have now been paid, with the remaining payments being:
- $100,000 on completion of the transaction;
- $150,000 on the later of CVS completing a $1 million capital raising, or completion of the transaction; and
- $200,000 on the later of 60 days following the purchaser completing the $1 million capital raising, or completion of the transaction.
Tony Sage, chairman, commented: “The finalisation of this transaction not only injects funds into the company but also allows us to completely focus on the flagship Wolfsberg Lithium Project.”
European Lithium continues to focus on its Wolfsberg Lithium Project in Austria, where results were recently received from the surface drilling program in Zone 2.
The two drill holes recently completed show wide intersections of spodumene rich pegmatite and samples are being prepared for lithium assay, for which results are expected shortly.
The 100% owned Wolfsberg project has a JORC resource estimate of 6.3 million tonnes at 1.17% lithium oxide.
Zone 2 is outside the current resource estimate and it is believed that Zone 2 has the potential to mirror the current resource, paving the way for resource expansion.