Archer Exploration Limited (ASX:AXE) has executed a legally binding contract for the sale of the Sugarloaf farmland located near the township of Cleve on South Australia’s Eyre Peninsula.
The Sugarloaf farmland is contained within Archer tenement EL 5920 and hosts the Sugarloaf carbon deposit and the proposed site of the Sugarloaf Graphite Processing Facility, which will be used to process the graphite from the nearby Campoona mining lease.
The sale consideration is $1.35 million with a 10% deposit already received and the remaining 90% to be received at settlement. The settlement is scheduled to take place on July 1, 2019.
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Archer purchased the farmland in April 2013 and at the time of the acquisition, the final size of the Sugarloaf Graphite Processing Facility and associated tailings dam was unknown.
Since 2013, Archer has finalised the design and areal extent of the Sugarloaf Graphite Processing Facility, and as a result, the company has made the decision to sell the Sugarloaf farmland to release funds for drilling and technology development.
Under the terms of the sale agreement, Archer will sell the entirety of the Sugarloaf farmland but maintains an option to buy back about 30% of the Sugarloaf farmland, which will be required for the construction of the Sugarloaf Graphite Processing Facility.
The option to buy back part of the land can be exercised by Archer any time during the next 20 years.
Archer chairman Greg English said: “The sale of the entirety of the Sugarloaf farmland, importantly allows Archer to free up capital that can be used to fund our upcoming drill program at Blue Hills and the Quantum Technology development work.”
“With the sale of the Sugarloaf farmland and the sale Leigh Creek Magnesite Project in July 2018, the company has now realised $3.35 million in asset sales during the past 6 months and we are constantly identifying new opportunities to monetise non-core assets.
“Archer continues to be well funded and we look forward to announcing the results from our upcoming RC drill program at Blue Hills and the Quantum Technology development work.”