Archer Materials Ltd (ASX:AXE) (OTCMKTS:ARRXF) (FRA:38A) has completed the sale of the Wadikkee and Carappee Hill tenements on South Australia's Eyre Peninsula to NextGen Materials Pty Ltd.
At completion, the company received 9.25 million NextGen shares at an issue price of $0.20 per share for a total value of $1.85 million and it is also entitled to receive an additional bonus payment equal to 5% of the enterprise value of NextGen at the time of that company's ASX listing.
Archer has also sold all of its remaining tenements to iTech Minerals Pty Ltd and will now fully focused on its quantum computing technology, including the development of the world-first qubit processor chip, 12CQ, for integration and end-use in mobile devices.
Retaining exposure
Shareholders will retain exposure to any exploration success on the NextGen tenements through Archer’s NextGen shareholding and the 2% net smelter return royalty granted to Archer.
The purchase price payable by NextGen for the purchase of the two Eyre Peninsula tenements is:
- Payment of $2 million. Archer has previously received $150,000 cash and, at completion, received the remaining $1.85 million paid in NextGen shares;
- Bonus payment equal to 5% of the enterprise value of NextGen at the time of ASX listing, expected by the end of September 2021, paid in cash or shares at the election of NextGen; and
- A 2% Net Smelter Return royalty on the value of all minerals, excluding graphite, extracted from the NextGen tenements.
iTech Minerals transaction
The company has agreed to sell the graphite rights and all of its remaining mineral tenements, excluding the NextGen tenements, to iTech Minerals Pty Ltd.
Completion of the iTech transaction is subject to the satisfaction or waiver of certain conditions precedent, including the iTech IPO (at $0.20 per new iTech share) and ASX listing (by the end of September 2021) and Archer shareholder approval (in early August 2021).
The cut-off date for the satisfaction or waiver of the conditions has been extended from July 31, 2021, to September 30, 2021, to give iTech more time to finalise the prospectus and Archer time to finalise the notice of meeting for Archer shareholder approval.
At the completion of the sale and purchase of the iTech Assets, Archer will receive 50 million ordinary shares in the capital of iTech and intends to distribute all of them to Archer shareholders on a pro-rata basis - which means shareholders will receive approximately one new iTech share for every 4.6 Archer shares held at the record date.
Director early options exercise
Meantime, non-executive director Alice McCleary has shown confidence in the company’s technology strategy by the early exercising of 1.17 million unlisted options at $0.1929 each.
With this purchase of the options that were due to expire on March 31, 2023, in an indirect interest, McCleary now holds 3,870,761 full paid ordinary shares in the company.