The binding Heads of Agreement (HOA) executed between the two companies follows an Independent Expert Determination on Monday that confirmed the 30:70 respective interests in the project.
This determination has been the catalyst for further discussions between the parties with the HOA to result in the dissolution of the Thackaringa Joint Venture which holds the project.
“Delighted” with commercial outcome
BPL’s shares increased almost 15% in early trade to 3.1 cents and the company said it was delighted that the parties had reached a commercial outcome.
This would “allow the development of the project with benefits accruing to shareholders of both companies”.
The agreement will provide COB with full control and continuing management of the project, which is near the traditional mining centre of Broken Hill in the far west of NSW.
Under the binding agreement BPL will receive:
- $500,000 cash;
- 9 million COB fully paid ordinary shares for 15 cents per share;
- $1 million three-year convertible note at interest of 6% per annum payable in arrears, convertible with 20-cent conversion price and with COB having an option for early payout; and
- $3 million five-year promissory note, interest-free for years 1, 2 and 3, and interest of 6% per annum for years 4 and 5, payable in arrears. This note is to be secured over the title to the tenements.
BPL retains the existing exploration base and precious metal rights and its existing 2% Net Smelter Royalty (NSR) on all cobalt production from the project.
The two companies are working together to complete all other necessary documents.