Meteoric Resources NL (ASX:MEI) has executed a legally binding agreement to sell the Juruena Gold Project in Brazil for a consideration of $30 million to Keystone Resources Ltd, a wholly-owned subsidiary of Alchemist Investments Inc.
The company is now well funded to accelerate the development of its Palm Springs Gold Project in WA while seeking to maximise shareholder value through acquisition and investment in complementary resources projects.
Moving forward, the Palm Springs field team has now mobilised to the site and will commence work with field reconnaissance and geophysics.
“Fully funded”
Meteoric managing director Andrew Tunks said: “We are pleased to announce the sale of our Juruena Gold Project in Brazil for up to US$22,000,000.
“I am very proud of the work we have completed in firstly identifying then securing Juruena followed by our successful exploration of the project over the past three years.
“During this time the team has produced some truly amazing drilling results ultimately resulting in a substantial mineral resource of 1.9 megatonnes at 6.3 g/t gold for 387,000 ounces.
“We consider this the ideal moment at which the pass Juruena to a group far better placed than ourselves to now develop the project, allowing Meteoric to focus on what it does best, which is the identification, acquisition and advancement of projects through high quality exploration focusing on results generated at the drill bit.
“The sale price of up to US$22,000,000 means Meteoric is fully funded to accelerate its exploration programs at the Palm Springs Gold Project in WA, while having a substantial cash balance to actively seek complementary investments and acquisitions.
Transaction summary
The obligations of Keystone are guaranteed by Alchemist Investments Inc, both of which are incorporated in Seychelles.
The consideration is in staged payments of:
- US$2,500,000 cash upon completion;
- US$7,500,000 cash six months after completion;
- US$10,000,000 cash twelve months after completion; and
- 2% gross royalty (capped at US$2,000,000 cash.
The ASX has confirmed that listing rule 11.2 does not apply to the agreement and accordingly there is no need for the company to obtain shareholder approval for the agreement or the sale of the Juruena Gold Project.
Changes to board
Meteoric managing director Andrew Tunks has stepped down from his position into a non-executive director role.
Tunks adds: “Having delivered this result for shareholders, I feel this is the right time for me to step down from the position of managing director into a non-executive director role.
“I personally would like to thank shareholders and the board for the opportunity to lead Meteoric since 2018.”
Commenting on Andrew’s change in role, Meteoric chairman Pat Burke said: “On behalf of the board and our shareholders, I would like to thank Andrew for his excellent leadership over the past four years.
“Andrew is equally at home in the field and the boardroom, and is always available to shareholders and investors, a great retail MD.
“We will miss his leadership but are very happy he is remaining in a non-executive role.
“The board has commenced a search for his successor to lead Meteoric’s next chapter on the back of this excellent result with the sale of Juruena.”
Forward plan
Well-funded from the sale agreement, Meteoric will kick off an induced polarisation (IP) survey over selected targets at Butchers Creek north and west, Golden Crown and Halls Gully.
The company has planned eight lines totalling about 5 line-kilometres for the IP survey.
The characteristics of mineralisation at Butchers Creek and Golden Crown (with up to 10% sulphides) make IP an ideal tool for exploring additional lodes/lenses.
Meteoric anticipates the IP survey will refine its drill planning at Golden Crown. The company believes there are opportunities to grow the current resource while also generating new targets that have never been tested by drilling to the north and west of the old Butchers Creek open pit.
Final optimisation models for a range of mining scenarios at Butchers Creek have been put on hold pending the results of the 2022 exploration season, including the IP and drilling, which are likely to have a significant impact on the global resource and therefore the results of the scoping study.