THE BOURSE WHISPERER: Potash West (ASX: PWN) advised the market of a binding term sheet executed between East Exploration Pty Ltd (EE) and Davenport Pty Ltd, a wholly owned subsidiary of Arunta Resources (ASX: AJR).
Potash West own 55 per cent of EE, which is the registered owner of the South Harz project, comprising two exploration licences, Küllstedt and Grafentonna, in Thuringia, Central Germany.
All owners have agreed to the sale, in return for shares in Davenport, which is to list on the Australian Securities Exchange via the raising of $4 million that is intended to be spent on drilling targets Potash West has already identified from a Geological Review.
EE will receive $250,000 as non-refundable option and exclusivity fees, approximately 36.46 million fully paid ordinary Davenport shares at listing price of 20 cents per share, plus just over 67.7 million performance shares, which will convert to ordinary shares on achieving pre-determined project milestones.
At listing, Potash West will receive 19.25 million shares, which it expects to be around 28 per cent of the issued capital of Davenport.