With consents granted, guarantees replaced and documentation executed, the sale of the Benagerie Mining Lease to CMC has closed.
The lease area in northeast South Australia, near Broken Hill, includes North Portia and the adjacent operating Portia Gold Project.
Havilah’s CEO Walter Richards said: “Closing this first transaction in the execution of Havilah’s Copper Strategy – Enhanced by Cobalt has progressed as planned.
“This transaction realises tangible value from our multi-commodity portfolio and will allow us to increase our focus on Mutooroo and Kalkaroo, the two core projects in our strategy.
“Recent exceptional copper-cobalt sampling results from the Mutooroo Cobalt District and the many prospects identified, have confirmed that we are focused on the right scope of work to maximise value generation.”
Series of payments
The first payment of $1 million has been received from CMC, which has also replaced Havilah’s share of the Portia rehabilitation obligation funding of $1.2 million.
A second $3.5 million payment is due on Havilah’s completing required permitting allowing the mining of overburden at North Portia and subsequent processing of the oxide gold component of the resource.
The third payment of $3.5 million is due with Havilah’s completion of permitting allowing for the mining and processing of North Portia supergene sulphide copper-cobalt-gold ore.
This is expected in the second half of 2019.
A final payment of $5.5 million is due 12 months after the second payment, which is expected in the last quarter of 2019.
The lease comprises the Portia and North Portia projects.
Gold revenue stream remains
The current Portia 15% gold revenue stream to remains until November 30, 2018, when the oxidized ore in the Portia pit is expected to be mined out.
At that time this interest will convert into the 2% NSR royalty.
The transaction includes a 2% NSR royalty on all commodity sales from the lease area.
This will increase to 3.25% on copper metal sales, once more than 101,400 tonnes of copper metal have been produced and sold from the lease.
Havilah maintains the first right to purchase any pyrite (contains cobalt) produced as a by-product from the production of copper and gold.
The company retains exploration rights to the Bassanio IOCG target on the Benagerie lease.