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New Energy Minerals amends ruby sale agreement to encompass $2.8 million cash payment

The closing date of the Merger of Ruby Assets Agreement with Fura Gems has also been extended by three months.

Hands shaking
New Energy is focused on the Caula Vanadium-Graphite Project in Mozambique

New Energy Minerals Ltd (ASX:NXE) will now receive $2.8 million in cash as part of an amended agreement with Fura Gems Inc (CVE:FURA) covering disposal of the company’s non-core ruby assets.

The Merger of Ruby Assets Agreement (MRAA) has been amended to include the cash rather than the originally agreed 10.5 million Fura shares to be issued over a 20-month period from closing.

READ: New Energy Minerals highlights Caula study economics as it targets early cash flows

Both parties have also agreed to extend the closing date of the agreement from November 30, 2018, to February 28, 2019.

This has been done to allow for the satisfaction of the remaining conditions precedent, principally being a binding tax opinion from tax authorities in Mozambique and Ministerial approval.

Concurrently, New Energy has also entered into a loan agreement with Fura for the aggregate amount of $2.8 million.

This agreement allows for New Energy to be able to draw down funds prior to completion of the MRAA, for purposes of settling any claims or disputes with Arena Investors, should this be required.

READ: New Energy Minerals’ ambitions in Mozambique supported by Louis Ching’s UBezTT

New Energy Minerals managing director Bernard Olivier said: “The amendment to the agreement and the cash consideration was specifically re-negotiated due to the statutory demand received from Arena Investors and places New Energy in an advantageous position in the dispute process.

“It is also particularly important as the company enters the financing stage of its pilot plant development at the Caula Vanadium-Graphite Project.

“The board of New Energy would like to thank Fura for renegotiating the terms of the MRAA at the request of the company.”

New Energy has also agreed to sell certain gemstone processing related plant and equipment to Fura for more than $489,400 independently of the loan agreement advances.

READ: New Energy Minerals' scoping study reveals exceptional economics for Caula Vanadium Graphite Project

The loan agreement is conditional on Fura obtaining TSX Venture Exchange approval for the loan within 21 business days.

Any advance by Fura under this agreement is conditional on either:

- Arena withdrawing its Statutory Demand, or
- Arena agreeing to withdraw the Statutory Demand conditional upon receiving an amount of money from the company not exceeding the amount of the commitment.

Quick facts: New Energy Minerals Ltd

Price: 0.007 AUD

Market: ASX
Market Cap: $1.2 m

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