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RMG Limited moves to 100% of Chilean copper project

Last updated: 16:00 28 Oct 2014 AEDT, First published: 15:00 28 Oct 2014 AEDT

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RMG Limited (ASX:RMG) has executed a binding agreement with its Joint Venture partner in the Tuina Copper Project, Chile, to acquire 100% of the Joint Venture previously entered into by the two companies.

RMG will issue 40,108,785 shares and 16,000,000 options exercisable at $0.099 on or before the end of August 2016 to Chile Metals or its nominee.

Chile Metals will assign a US$1.56 million debt owed to it by Sociedad Contractual Minera Porvenir to RMG and will retain a 2% NSR over all permits, excluding the permits subject to the Porvenir Option Agreement.

RMG may purchase 50% of the NSR for US$10 million.

The transaction simplifies the structure of the original Joint Venture and provides a clear ownership structure for the future development and financing of the Tuina Project.

The assignment of the Porvenir debt also provides RMG with greater flexibility in its future negotiations with Porvenir with respect to the existing option agreement it has with that company.

RMG’s objective at Tuina in northern Chile is to assess the opportunity for additional copper oxide resources and copper oxide dumps to generate an early cash flow, and establish a significant copper sulphide flotation plant.

In Australia, RMG controls the Kamarga Zinc Project, located 20 kilometres southeast of the Century lead-zinc mine in north-west Queensland.

 

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