Latin Resources Ltd (ASX:LRS) will pocket $6.8 million in cash and shares from the sale of its Ilo Norte and Ilo Este copper projects in Peru to Westminster Resources Ltd (TSX-V:WMR).
Following due diligence and receipt of all necessary regulatory approvals, the consideration for the deal will be A$6.5 million in shares and US$250k in cash.
The current market cap of Latin is circa A$12 million, so the divestment of the copper assets adds significant tangible value to the company's portfolio.
Following the deal, Latin will be the largest shareholder of Westminster with a 45% stake.
Latin to focus on lithium and cobalt
The sale of the assets will enable Latin to focus its resources on the development of its Lithium projects in Argentina
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Analysis
Latin Resources gets a dual-benefit from the deal.
The first is extracting value from these non-core assets so the focus can remain on its lithium and cobalt strategy, while secondly, Latin maintains exposure to upside in the assets through Westminster.
Latin will also save $140,000 a year in concession costs.