Lotus Resources Ltd (ASX:LOT) has reached an agreement to divest its Hylea Cobalt Project in central New South Wales, to Sunrise Energy Metals Limited (ASX.SRL) for total consideration of $2.5 million.
This sale comprises a $1 million cash payment and $1.5 million in Sunrise shares.
The transaction is anticipated to close following ministerial approval for the transfer of the exploration licences for the Hylea Project.
Non-core to strategy
Since acquiring the Kayelekera Uranium Project in Malawi in 2019, the Hylea Project has become non-core to the company’s long-term strategy.
Lotus managing director Keith Bowes said: “As the company remains firmly focused on positioning the Kayelekera Uranium Project for a restart in an improving uranium price environment, the Hylea Project, which has excellent long-term potential, has become a non-core asset for the company.
“As a result, little, if any, value is ascribed to the company’s share price for the project.
“This transaction allows the company to immediately realise value for this project through the cash component of the transaction, which will be used to further advance Kayelekera, whilst also maintaining an exposure to Sunrise’s exciting portfolio of NSW-based EV metals assets through the share consideration.”
Location of the Hylea Project in relation to Sunrise.
Sunrise Energy Metals
Sunrise is developing the Sunrise Project, around 50 kilometres from the Hylea Project, which is reportedly one of the largest cobalt deposits outside of Africa and one of the largest and highest-grade accumulations of scandium globally.
Notably, the Hylea Project’s geology exhibits similar structural geology to the Sunrise Project, where the weathered surface expression of the intrusive hosts nickel, cobalt and scandium mineralisation.
Sunrise chief executive officer Sam Riggall said: “Acquisition of the Hylea Project is consistent with our strategy to expand our footprint in the highly prospective Lachlan Fold Belt by adding to our already sizeable inventory of nickel and cobalt.
“We believe that demand for these metals in coming years will be enormous.
“With enough nickel and cobalt in our current Sunrise resource to support approximately 1.5 terawatt-hours of cathode capacity, our objective is to continue adding to this resource base in a region that provides safe, sustainable, low-cost supply.”