Royal Resources (ASX: ROY) has completed the sale of the Warriedar Iron Ore Joint Venture (WIOJV) in Western Australia to Gindalbie Metals (ASX: GBG) for A$7 million, as part of its strategy to exit the Mid West of the state.
Gindalbie’s offer for Royal’s 40% interest in the WIOJV had originally been for a consideration of $8 million cash for all of Royal’s holdings in the area of the WIOJV ground, including Royal’s residual 40% interest in the Warriedar Gold Joint Venture (WGJV).
Minjar Gold Pty Ltd, holder of a 60% interest in the WGJV, subsequently decided to exercise its pre-emptive right over Royal’s interest for a consideration of $1 million cash, reducing Gindalbie’s payment to $7 million. Minjar’s buy-out of the WGJV is yet to be completed.
Marcus Flis, managing director of Royal, said “this asset disposal will allow Royal to focus on advancing our flagship Razorback Iron Project in South Australia."
The decision was driven by the increasing value of the Razorback Iron Project compared with the uncertainty of both the development of the iron mineralisation delineated by the Warriedar JV partners and a port to export any production through.
The finalisation of this transaction had been delayed pending legal advice as to Minjar’s claim that it had a pre-emptive right over the WIOJV as well. Senior counsels have advised both Royal and Gindalbie that Minjar’s claim is without merit.