Azure Minerals Ltd (ASX:AZS) has entered into a binding, conditional sale agreement to sell the subsidiary companies that own and operate its Mexican precious and base metals projects to Bendito Resources Inc for a combination of cash and shares valued at A$20 million.
The company will receive on completion of the transaction an immediate payment of A$6 million in cash and a 10% equity interest in Bendito, nominally valued at A$2 million.
A second tranche of A$4 million in cash and A$8 million in shares is payable within 18 months of completion of the transaction.
Benditio is planning to advance both the Alacrán and Oposura projects through intensive drilling, ahead of its intention to list on the Toronto Stock Exchange (TSE) within 18 months of completion of the transaction
Looking ahead, it is anticipated that the issues of shares by Bendito to Azure will result in Azure owning a maximum of about 15% of the issued capital of Bendito post the TSE listing.
“Great outcome”
Azure managing director Tony Rovira said: “This is a great outcome for Azure and our shareholders.
“We have realised a significant cash return for the assets while retaining exposure to the upside as the projects are further developed.
“We still see potential in these high-quality, advanced-stage projects and it makes sense for them to sit within a dedicated special-purpose group focused solely on Mexico, which can take them through development funded by the North American capital markets.
“The team behind Bendito has a successful track record of identifying, acquiring, developing and operating projects, so retaining exposure to these assets that we know so well should be both exciting and rewarding for Azure shareholders.
“With these extra funds, we will accelerate activities on our Andover Nickel-Copper Project in WA which is proving to be a company-maker for Azure as we progress along the dual pathways of growing the mineral resources and advancing the development studies.”
Azure's Mexican portfolio.
Transaction summary
In February 2021, Azure commenced a strategic review of its 100%-owned Mexican portfolio, including the Alacrán silver-gold-copper and Oposura zinc-lead-silver projects, to determine how best to optimise the value for Azure shareholders, given Azure's focus had pivoted to its exciting WA nickel, copper and gold projects, which includes the advanced-stage Andover Project.
The outcome of the review was a decision to divest the assets and Argonaut PCF was appointed to conduct a sales process, which attracted significant global interest
This has resulted in Azure entering into a share purchase agreement on May 27, 2022, with Bendito and its wholly-owned subsidiary, Bendito Resources Mexico Inc.
Under the share purchase agreement, the company has agreed to sell all of the shares in Azure Mexico Pty Ltd and the single share that Azure holds in each of Minera Piedra Azul SA de CV, Minera Capitana SA de CV and Minera Tlali SAPI de CV for aggregate consideration of $20 million - consisting of A$10 million cash and A$10 million shares in Bendito.