THE BOURSE WHISPERER: Cazaly Resources (ASX: CAZ) finalised the sale of the Parker Range iron ore project to Mineral Resources (ASX: MIN).
The sale of the project includes the tenements (M77/0741, M77/0742 and M77/0764), the mining information, contracts and authorisations for the Project.
The sale follows Cazaly Resources (ASX: CAZ) receiving a binding Heads of Agreement (HoA) proposal from Mineral Resources to purchase the Parker Range project.
Cazazly had previously agreed commercial terms for the sale of its 100 per cent-owned subsidiary, Cazaly Iron Pty Ltd, which holds the tenements that comprise the project, to Gold Valley Iron Pty Ltd.
The agreement with Gold Valley allowed for an initial three-month due diligence exclusivity period, however Cazaly reserved the right to terminate the exclusivity period should it receive another proposal or offer from a third party which is more favourable to Cazaly and its shareholders.
The Mineral Resources deal fit that description.
The unsolicited HoA proposal from Mineral Resources involves a payment of $2 million cash upon completion of the sale; and a royalty of 50 cents for every dry metric tonne of iron ore extracted and removed from the project area the first 10 million dry metric tonnes.
Cazaly declared the binding HoA proposal from Mineral Resources to be more favourable to the company and its shareholders and subsequently terminated the exclusivity period with Gold Valley.
Cazaly said it had received the cash consideration of $20 million from Minerals Resources and has terminated the Term Sheet with Gold Valley Iron Pty Ltd, which ceases to be in force or effect.