Savannah Resources PLC (LON:SAV) said it has completed the sale of its stakes in the Block 4 and Block 5 copper projects in Oman to Force Commodities Ltd (ASX:4CE).
Savannah will receive 50mln new fully paid ordinary shares issued by Force, giving Savannah a 4.9% stake in Force after four million shares are used to settle transaction costs.
Savannah will receive preferential payment of A$3.5mln in cash from an existing loan out of cash flow generated from production on Block 5. And it will also get a 1% net smelter royalty on any future metal sales from Force’s portions of Block 4 and Block 5.
The deal allows Savannah to focus its resources on the development of the Mina do Barroso lithium project in Portugal and the Mutamba mineral sands project in Mozambique.
"We have now concluded the sale of our projects in Oman to Force, which we first announced in September,” said Savannah chief executive David Archer in a statement.
"The strategic review we initiated last year looked at a number of options regarding Savannah's ongoing participation in the projects. It concluded that an appropriately structured divestment, which allowed Savannah to retain an interest in the projects' long term economic success, represented the best outcome available to us. The transaction gives Savannah a meaningful shareholding in Force as well as the potential for cash payments from any future production from the projects,” he added.