Sign up Australia
Proactive Investors - Run By Investors For Investors

Montezuma Mining does deal with Magmatic Resources for Mt Venn

The company will receive cash and shares upfront plus potential milestone payments.
a deal being signed, two hands with pens signing a page
Cash from the disposal can be used on the company's high priority projects

Montezuma Mining Company Ltd (ASX:MZM) has entered a binding agreement with Magmatic Resources Ltd (ASX:MAG) to sell an exploration tenement at the Mt Venn intrusion, Western Australia.

The deal is structured for a win-win outcome between the two companies in that Magmatic gets a high priority project and Montezuma remains leveraged to its upside.

On acquisition, Montezuma will receive $250,000 cash and $425,000 worth of Magmatic shares.

Notably, Montezuma can receive further payments of up to 6.4 million if Magmatic reaches various milestones.

Magmatic must spend $500,000 within 18 months

Fortunately for Montezuma, it has a number of higher priority projects in its portfolio than Mt Venn.

However, Mt Venn is a project with growing potential, as seen by neighbouring explorer, Great Boulder Resources Ltd (ASX:GBR).

Great Boulder has intersected wide zones of primary copper-nickel-cobalt sulphide mineralisation which included intersections of 48 metres at 0.75% copper, 0.2% nickel and 0.07% cobalt.

READ: Great Boulder Resources confirms copper-nickel-cobalt discovery and will expedite development

The deal keeps Montezuma leveraged to the project’s success and it also states that Magmatic must spend $500,000 within 18 months.

This ensures exploration funding is utilised by Magmatic to explore the project’s potential.

Montezuma can receive up to $6.4 million in further payments

The Mt Venn project, or E38/2961 sale, is bound by the following terms:

• On acquisition Magmatic will pay Montezuma A$250,000 in cash and A$425,000 in MAG shares;
• Should Magmatic define a JORC resource of 20 million tonnes at 1% copper equivalent, Magmatic will pay Montezuma A$350,000 cash and A$350,000 in MAG shares;
• Should Magmatic make a decision to mine, it will pay to Montezuma A$350,000 cash and A$350,000 in MAG shares;
•  Montezuma will retain a 2.0% net smelter royalty (NSR) on production at E38/2961 but Magmatic can buyback the option for A$5 million cash; and
• Magmatic must expend a minimum of A$500,000 on exploration at E38/2961 within the first 18 months following acquisition and must pay Montezuma the difference if it spends less.

READ: Montezuma Mining Company expedites manganese project with mining lease application

Montezuma Mining recently initiated a scoping study to review the potential for the Butcherbird Manganese Project located in Western Australia.

The company aims to produce a range of high-value manganese products on a commercial scale.

The study will assess the options for project development and provide an assessment of the potential capital and operating cost requirements for project development.

View full MZM profile View Profile

Montezuma Mining Company Ltd Timeline

Related Articles

March 07 2018
Scotgold has won permission to proceed with a modified mine plan at Cononish
October 11 2017
Tethyan Resources is sitting on promising mineralisation in a prime location in Europe
Gold pour
Total gold equivalent ounces (GEOs) produced clocked in at 189,456, up 17% on the 161,289 GEOs produced in 2016...

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use