PepinNini Minerals Ltd (ASX:PNN) has signed an agreement to purchase all of the issued shares in Hillside Minerals Pty Ltd, which has applied for a number of exploration licences in South Australia.
This includes two exploration licence applications covering 1,129 square kilometres on the Eyre Peninsula in South Australia.
There are recorded occurrences of kaolin clay and both tenements directly adjoin tenements held by Andromeda Metals Ltd (ASX:ADN) that have JORC 2012 resources of kaolin and halloysite.
Acquisition consideration
The purchase consideration is payable in PNN shares and options and this will involve PepinNini seeking approval at a shareholder meeting.
There are three Hillside vendor shareholders, none of whom are related parties of PepinNini.
The transaction will be completed in two stages and in stage 1, which is subject to shareholder approval and due diligence, 1.75 million PNN ordinary shares will be issued to the vendors and the company will acquire all issued shares of Hillside.
Under stage 2, following the successful grant of the tenements, 4.5 million PNN ordinary shares and 1.2 million unquoted options exercisable at 35 cents expiring on December 31, 2023, will be issued to the vendors as the final purchase consideration.
Proposed joint venture
Following the completion of stage 2, a joint venture between PepinNini and the vendors will be established.
The vendors will establish a new entity for participation in the joint venture for the exploration of the tenements.
This proposed JV will be 80%-owned by PepinNini and will also be managed by it while the 20% ownership will remain with the new entity.
The new entity’s interest will be free carried until a decision to mine the tenements, at which point an 80:20 mining JV would be established.
PepinNini would continue as manager and both parties would contribute to the JV according to their respective shareholdings.