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Hexagon Resources bags cash from non-core asset sale

Published: 10:00 05 Dec 2016 AEDT

deal
Hexagon will now have additional funds for McIntosh.

Hexagon Resources (ASX:HXG) will now have additional funds for its flagship McIntosh Flake Graphite Project in the East Kimberley, Western Australia, after signing a sales agreement for its South Korean assets.

The share sale agreement is subject to finalising due diligence, and is with Battery Material Resources Limited (BMR), an unlisted Australian public company.

Key terms:

- Payment of A$700,000 (cash consideration) to HXG in cleared funds on the completion date.

- Issue of 5 million fully paid ordinary shares in BMR to HXG on the completion date. The shares which will not be subject to any kind of escrow or restriction on dealing, except for the minimum restrictions imposed by the securities exchange, on which BMR seeks to list.

- If BMR does not list within 15 months after completion, Hexagon has a put option to sell the BMR shares back to BMR for the higher of their market value at the time or $500,000 plus a 10% per annum return compounded.

- Each party gives the other warranties consistent with the nature of the transaction.

Tony Cormack, Hexagon’s CEO and head of operations, commented:

"This is a great deal for the company and its shareholders with the cash proceeds to go towards the advancement of the company’s flagship project at McIntosh.

"We are also retaining the potential upside with the development of the South Korean assets by Battery Material Resources.

"We have been impressed with the quality of the assets and people BMR have put together and look forward to the advancement of their projects."


McIntosh

McIntosh has a JORC resource estimate of 17.2 million tonnes at 4.63% total graphitic carbon for 797,200 tonnes of contained graphite.

This is one of the largest JORC compliant flake graphite resources in Australia with less than 15% of the strike length at McIntosh drilled to date.

Laboratory work has found that a >99% carbon concentrate can be produced from the bulk McIntosh samples through a simple grind and float process.

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