Archer Materials Ltd (ASX:AXE) (OTCMKTS:ARRXF) has signed a legally binding sale agreement with private company Baudin Minerals Pty Ltd for the sale of two non-core tenements on South Australia’s Eyre Peninsula.
The sales agreement provides for the purchase price of $2 million-plus a bonus share payment to be paid to Archer when the buyer lists on a stock exchange.
Archer will also be granted a 2% net smelter return royalty on minerals extracted from the tenements.
This sale is consistent with Archer’s strategy of monetising non-core mineral exploration assets to fund and grow its advanced materials business, in particular development of the 12CQ room-temperature quantum computing chip and graphene-based A1 Biochip.
Sale to fund tech-related activities
Archer chairman Greg English said: “We believe this is a good deal for our shareholders.
“The proceeds from the sale of the tenements will assist in the funding of our tech-related activities.
“In addition to the upfront payment at completion, Archer will also receive royalty payments should the buyer discover minerals and commence mining on the tenements.
“The royalty would allow the company to financially benefit from any future development of these projects.”
Archer retains the rights to explore for, and mine, graphite on the tenements, and the sale of the tenements does not require Archer shareholders’ approval.
Agreement terms
Completion of the sale and purchase of the tenements is conditional upon the buyer conducting due diligence by March 15, 2021, South Australian Government approval and the buyer listing on a stock exchange.
Completion of the process will take place on June 30, 2021, or such other date agreed by Archer and the buyer.
The date for completion may be extended by the buyer for three months at a time by paying to Archer $100,000 per extension up to a total of $200,000 as extension payments.
Terms also require the buyer to pay a $50,000 non-refundable deposit at the signing of the agreement and a further non-refundable $100,000 as additional deposit if the buyer elects to proceed after the end of the due diligence period.