THE BOURSE WHISPERER: Peel Mining (ASX: PEX) exercised its pre-emptive muscle to acquire Weddarla Pty Ltd’s 1.5 per cent Net Smelter Return (NSR) royalty over tenement EL8307, within the company’s Southern Cobar Basin tenements in New South Wales.
Peel Mining fought off a third party’s unconditional cash offer of $1.2 million made to Weddarla by a Toronto Stock Exchange listed royalty streaming business.
Respecting Peel’s first right of refusal under the Royalty Deed, Weddarla offered to sell the royalty to Peel for $1.2 million (excluding GST) in cash.
Peel elected to exercise its right to acquire the royalty interest, after which it will have 100 per cent unencumbered ownership of all its Southern Cobar Basin tenements.
“The unconditional cash offer from a TSX-listed royalty streaming business for the 1.5 per cent NSR royalty covering EL8307 continues to underscore the widespread interest that exists for Cobar Basin assets, and the strong economic potential therein,” Peel Mining managing director Rob Tyson said in the company’s announcement to the Australian Securities Exchange.
“Peel’s pre-emptive right has ensured that the company can completely consolidate its Southern Cobar Basin tenements removing all future ownership encumbrances.”
EL8307 contains the Wirlong copper-silver deposit, as well as the Sandy Creek and Red Shaft prospects.
Peel discovered Wirlong in 2016, which is a classic Cobar-style VMS copper deposit that has returned strong copper mineralised intercepts commencing from around 60 metres below surface to at least 600m below surface.
With the Mallee Bull deposit, Wirlong increases the company’s exposure to copper.
Peel intends to undertake drilling at Wirlong over the coming months with the objective of establishing a copper-rich Maiden mineral resource estimate.
“As foreshadowed, it is the company’s intention, in due course, to undertake a resource drillout at Wirlong in order to establish a maiden mineral resource estimate,” Tyson said.
“It is our strong belief that Wirlong, and the broader EL8307 landholding, has excellent economic potential, and the buyout of the royalty interest underlines the Company’s view on the value proposition.”