Carnavale Resources Ltd (ASX:CAV) has inked an option agreement for the sale of its Barracuda nickel-copper-platinum group element project licence, near Mt Magnet in WA, with Midas Resources (ASX:MDS) Ltd.
The sale is part of Carnavale’s strategy to leverage its non-core exploration assets while maintaining a strong focus on gold exploration and development at its Kookynie Gold and Ora Banda South Gold projects.
To this end, CAV’s wholly-owned subsidiary Tojo Minerals Pty Limited has entered a binding heads of agreement with Midas to exclusively acquire Tojo’s interests in the licence, E58/551.
Sale cements value of assets
“We are excited to enter this partnership with Midas, with an experienced corporate and technical team that is looking to refocus its activities in the Murchison Region of Western Australia,” Carnavale Resources CEO Humphrey Hale said.
“The transaction will allow CAV to continue our aggressive focus on the Kookynie and Ora Banda Gold Projects in Western Australia, while allowing us to crystallise value from one of our non-core assets.”
The material terms and conditions of the option agreement are as follows:
- Midas will pay $20,000 for the initial 12-month option period;
- Midas will pay a further $20,000 on the first and second anniversary, if it elects to extend the option term;
- exercise of the option is conditional on completion of due diligence on E58/551 to the satisfaction of Midas and obtaining all other necessary third-party consents and approvals (including in relation to the existing royalty related to E58/551);
- Midas can exercise the option with payment of $300,000, which Midas can elect to satisfy in Midas shares at a deemed issue price of the five-trading day volume weighted average price of Midas shares immediately prior to the exercise of the option;
- Midas will pay a further $500,000 on completing a JORC compliant mineral resource within the tenement area; and
- CAV will receive a 0.5% net smelter return (NSR) and Midas will assume responsibility for an existing 0.5% NSR to third parties.