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Venus Metals boosts cash balance through two new transactions

Published: 11:30 11 Jun 2020 AEST

Venus Metals Corporation Ltd - Venus Metals boosts cash balance through two new transactions
A sale and purchase heads of agreement has been signed with eMetals

Venus Metals Corporation Limited (ASX:VMC) will boost its cash balance through two new transactions, including the sale of Poona lithium-caesium-tantalum (LCT) project in WA’s Murchison region to eMetals Ltd (ASX:EMT)

The company will also receive funds from the Youanmi joint venture project after partner Rox Resources Limited (ASX:RXL) elected to acquire an additional 20% Interest, lifting its stake to 70%.

Agreement with eMetals

Venus has entered into a conditional binding tenement sale and purchase heads of agreement with eMetals in regard to the Poona project.

This agreement sets out the terms upon which eMetals may acquire a 100% legal and beneficial right, title and interest in WA mineral tenement E20/896 and a 90% legal and beneficial right, title and interest in tenement E20/885.

The acquisition is consistent with eMetals strategy of acquiring or investing in projects to complement its existing portfolio of strategic and rare metal projects.

Prospective for LCT

Poona project is about 70 kilometres northwest of Cue in the Murchison Domain of the Yilgarn Craton, is serviced by sealed and unsealed roads and is close to rail and gas infrastructure.

The project is prospective for LCT type pegmatite mineralisation hosted within the greenstone belts of the Weld Range.

Poona remains lightly explored with 42 holes drilled on E20/885 and no known drilling on E20/896.

eMetals director Mathew Walker said: “We’ve certainly been busy since relisting in January this year and the acquisition of the Poona Project adds further opportunity and excitement to the scheduled exploration activities at both the Poona Project and flagship Nardoo Rare Metals Project in the Gascoyne Region of Western Australia.”

Agreement terms

Terms of the agreement are:

  • A$15,000 payable on the execution of the agreement;
  • A$145,000 paid on the settlement date;
  • The assumption of VMC’s existing JV arrangement with Bruce Legendre in relation to E20/885, which entitles Mr Legendre to a free carried 10% interest until such time as eMetals makes a decision to mine on that tenement;
  • A royalty to VMC of A$0.50 per tonne of ore extracted for mining purposes (ie not waste product) from E20/896, payable only on and from commercial mining on that tenement;
  • Two royalties which together aggregate to a 1.5% net smelter royalty to historical explorers and prospectors on E20/885, payable only on and from commercial mining on that tenement; and
  • Performance payments of up to A$100,000 subject to and conditional upon the achievement of performance milestones.

Rox exercises option

Rox Resources has also advised Venus that it has exercised its option to acquire an additional 20% interest in the OYG Joint Venture at the historic Youanmi mining centre.

This will take Rox’s interest to 70% while Venus will retain 30%.

The additional stake involves the payment of $2 million in cash and $1 million in RXL shares valued at 2.4 cents to Venus.

Rox initially acquired a 50% interest in the OYG JV in April 2019 by providing funding of $2.8 million which was applied to the cash component of VMC’s option exercise to acquire the OYG tenements.

In addition, Rox issued VMC $200,000 in Rox shares at a deemed price of 0.8 cents.

Rox was also required to meet exploration expenditure of $2 million over the following two years to June 2021 and to cover the costs of holding and managing the project.

This $2 million commitment has been met and acknowledged by VMC.

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