VRX Silica Ltd (ASX:VRX) has entered into a conditional agreement to sell its wholly-owned subsidiary, Ventnor Gold Pty Ltd, which owns the Biranup Nickel and Gold Project in WA, to New Energy Metals Ltd, for a combination of cash and shares.
The deal will see VRX Silica participate in the proposed listing of nickel-focused New Energy Metals on the ASX later this year.
In addition, VRX Silica shareholders will be given priority for Initial Public Offering (IPO) applications in New Energy Metals.
The move will enable the company to fully focus on becoming a global supplier of high-quality silica sand.
"Ideal outcome"
VRX Silica managing director Bruce Maluish said: “We are delighted to have reached agreement with NRG on the terms for the sale of the Biranup project which will enable VRX Silica to share in any future exploration success.
“The Biranup project tenements have an extensive and comprehensive exploration database that we have assembled and this will be a great starting point for NRG.”
“This is an ideal outcome for VRX Silica and its shareholders as it will allow us to focus on the company’s stated aim of becoming a global supplier of high-quality silica sand.”
Shares have been as much as 15% higher to 10.5 cents intra-day.
NRG seeks to list on ASX
NRG is an unlisted public company planning an IPO and ASX listing later this year.
The nickel sulphide-focused exploration company with exposure to the Albany Fraser Orogen and South West Yilgarn and retains a proprietary nickel sulphide prospectivity database to generate further projects.
Biranup Project deal
The Biranup project is in the highly prospective Albany-Fraser Orogen in Western Australia, an area which hosts IGO Ltd’s (ASX:IGO) Nova nickel mine and the world-class Tropicana Gold Deposit of around 10 million ounces.
Within this region, the much-anticipated drilling program being conducted by Legend Mining Ltd (ASX:LEG) is drawing plenty of attention.
Sale details
Under the deal, VRX will be paid:
• 6.25 million fully paid ordinary shares in NRG at a deemed issue price of 20 cents;
• Cash milestone payments of:
- $200,000 upon delineation of a JORC-compliant inferred resource of no less than 7.5 million tonnes at a grade of 2% nickel and 0.5% copper on the land comprising the tenements;
- $200,000 at the completion of a feasibility study of the Biranup project demonstrating it can operate as a commercially viable enterprise; and
- $500,000 at the first commercial extraction of any minerals, mineral products, ore or concentrates, in whatever form, from the Biranup project.
The completion is subject to due diligence, NRG conducting the IPO, including raising necessary capital and receiving ASX conditional approval for listing of its securities; and the parties obtaining all necessary board, shareholder, third party and regulatory approvals and consents required to complete the sale.