IMX Resources (ASX: IMX) is an Australian based, diversified resources developer and explorer, holding a diverse portfolio including core projects in copper, nickel, iron ore and PGE.
IMX's strategy is to become a mid-tier miner through the development of a portfolio of assets based on multiple commodities coupled with geographical diversity, with operations and interests in Australia, Africa and India.
IMX Resources and OZ Minerals announce Heads Of Agreement and Share Placement
IMX Resources (ASX:IXR) and OZ Minerals (ASX:OZL) have penned a binding Heads of Agreement with the intention of forming a Joint Venture Agreement to explore for and develop copper-gold projects on IMX’s Mt Woods tenements in South Australia.
The tenements are largely contiguous with OZ Minerals' tenements, which include its Prominent Hill mine.
IMX will retain the rights to any predominantly iron ore discoveries.
IMX managing director Duncan McBain said the company saw the proposed copper-gold Joint Venture as a win-win situation, resulting in a greatly increased level of exploration expenditure for copper-gold targets during the next five years.
"IMX intends to be a very active Joint Venture partner," Mr McBain said.
"With IMX retaining the rights where iron ore is the dominant economic mineral, it means we are able to continue to expand our iron ore strategy in the Cairn Hill / Mt Woods area."
OZ Minerals considers the area surrounding the Prominent Hill copper-gold mine to be prospective for the
discovery of similar types of deposits and as such, the tenements surrounding Prominent Hill are a high
exploration priority.
OZ Minerals managing director and chief executive Terry Burgess said the Joint Venture would allow exploration on the IMX tenements to be expedited for the benefit of both OZ Minerals and IMX shareholders.
"The proximity of the tenements to the existing Prominent Hill mine infrastructure greatly enhances the chance of an economic discovery,” Mr Burgess said.
In addition to the exploration agreement, IMX has agreed to place 26,150,000 fully paid ordinary shares (representing 15% of its issued capital) to OZ Minerals at 38.5 cents per share, which is a 25% premium to the 30-day VWAP prior to this announcement.
IMX will receive $10.068m from the placement.
Following the placement OZ Minerals will hold 13.0% of IMX.
The two parties have entered a binding Heads of Agreement with the intention of rapidly progressing this to a formal Joint Venture Agreement.
On signing the Joint Venture Agreement, OZ Minerals will immediately earn a 51% interest in the proposed copper-gold Joint Venture and will retain this provided it spends a minimum of $4 million a year over the next five years for a total of $20m.
If OZ Minerals fails to spend this amount it forfeits the entire 51%. After this expenditure, both parties have the option to contribute pro rata to any further expenditure on exploration.
Should IMX not contribute, OZ Minerals can earn up to a maximum of 75% at this phase by sole funding a further $20m, with IMX progressively diluting. IMX cannot be diluted below 25% and would at this point be free carried through the conclusion of a bankable feasibility study (BFS) on any discovery.
Upon successful completion of a BFS and subsequent decision to proceed with a development, IMX has the option of either funding its 25% share of development to retain its interest or converting to a royalty of between 2.5-3.0%.
Depending on the magnitude and nature of any discovery, ore from a development could be processed through OZ Minerals Prominent Hill operations.
The Joint Venture excludes any discoveries made by either IMX or the Joint Venture in which the iron ore/magnetite value exceeds the combined value of the other minerals which will then revert to IMX.
The Joint Venture excludes iron ore/magnetite on the Cairn Hill mineral lease currently owned by Termite Resources NL (100% IMX) but does include any new discoveries that are not predominately iron on this lease.
