THE BOURSE WHISPERER: There are plenty of companies out there at the moment with projects screaming to be developed.
Needless to say the current equity climate isn’t as sunny as these companies would like.
That said, there does seem to be a fair bit of activity in the marketplace in regards to merger and partnership buy-ins.
This makes perfect sense as many junior miners are struggling to cover corporate overheads, directors’ fees and compliance costs on limited budgets.
Teaming up with a perceived equal or merciful benefactor boosts their scale and – hopefully – their returns on exploration.
Augur Resources (ASX: AUK) has entered into a binding Subscription Agreement with the Rajawali Group, one of Indonesia’s largest privately-owned conglomerates.
The Agreement is subject to a number of conditions precedent, including approval of Augur shareholders and provides for Rajawali to initially subscribe for 60 million Augur shares, equivalent to 22.6 per cent of the company’s issued shares for cash consideration of $3 million.
Additionally, Rajawali has an option to subscribe for an additional 50.36 million Augur shares for $3.75 million.
The opportunity to team up with well-respected Indonesian company, with significant Indonesian mining experience, such as Rajawali is an exciting and important step for Augur and bodes well for the ongoing development of the Wongiri project and for Augur itself,” Augur Resources managing director Grant Kensington said.
Northern Minerals (ASX: NTU) has finally disclosed the identity of its MOU partner for the HRE off-take agreement from the company’s Browns Range project it announced in December last year.
Northern minerals has removed the mask and cowl to reveal Sumitomo Corporation of Japan as its caped crusader.
The company explained it did not disclose the identity of its MOU partner at the time, due to ongoing commercial negotiations.
However, since then Northern Minerals and Sumitomo Corporation have completed discussions in regards to product specifications, transport and pricing, and developed their commercial relationship.
The original terms of the MOU still apply in which both parties will form a binding agreement for the supply of 1500 tonnes per annum of TREO heavy rare earths (HRE) concentrate product from the Browns Range project to Sumitomo Corporation.
Northern Minerals anticipates the MOU to be converted to a binding agreement once it has made substantial progress toward the completion of its feasibility study in mid-2014.
Northern Minerals is working towards commencing HRE production in 2016.
“For a company of the standing of Sumitomo Corporation to partner with Northern Minerals it is a great vote of confidence in the Browns Range project, and indicates the significant opportunity that the project presents,” Northern Minerals managing director and CEO George Bauk said.
“It also reinforces the confidence in the REE industry and the fundamental demand for heavy rare earths such as dysprosium which dominate the HRE mix at Browns Range.
“We intend to leverage the success of this commercial arrangement to establish similar arrangements with other global companies for the exploration and development of the greater Browns Range area.”
Nkwe Platinum (ASX: NKP) has formed a strategic partnership with Zijin Mining Group. The main objective of the partnership is to develop Nkwe’s South African PGM assets, in particular the company’s Garatau mining project.
“This is more than a strategic relationship – definitely a partnership Joint Venture,” Nkwe executive director Peter Landau said in a video on the company’s web site.
“They ultimately will operate the Garatau project, and obviously provide all the necessary capital.”
Under the terms of the deal, Zijin, through its wholly-owned subsidiary Jin Jiang Mining, will invest $20 million in Nkwe by a placement of three-year convertible bonds.
Nkwe recently obtained shareholder approval for the transaction.
The completion of the transaction is to be conducted over two tranches:
the first tranche of $7 million convertible bonds will be issued on or before 23 October 2013; and
the second tranche of $13 million convertible bonds will be issued on or before 31 December 2013. To complete funding under the Final Tranche, Zijin and Nkwe are working together to complete additional security arrangements (including registration of such security interests) to satisfy one of the final conditions of the original Convertible Bond Subscription Agreement.
Australian gold company Chalice Gold Mines (ASX: CHN, TSX: CXN) and Canadian gold developer Coventry Resources Inc. (TSX-V: CYY, ASX: CYY) have agreed to merge.
The company’s consider the move will combine Chalice’s strong cash position of $55 million with Coventry’s 100 per cent interest in the Cameron Gold Camp in Ontario, Canada.
Under the proposed Merger, Coventry shareholders will receive one Chalice Share for every 1.78 Coventry Shares and will hold approximately 17 per cent of the merged company.
The proposed Merger has the full support of the Board of Directors of both Chalice and Coventry with the Board of Coventry telling Chalice that, in the absence of an unfavourable fairness opinion or a superior offer, it will unanimously recommend its shareholders vote in favour of the proposed Merger.
The Cameron Gold Deposit currently comprises an NI 43-101/JORC (2004) (1g/t cut-off) compliant Measured and Indicated Mineral Resource of 567,100 ounces of gold at 2.45 grams per tonne and an Inferred Mineral Resource of 830,100 ounces of gold at 2.11g/t.
In addition, at two satellite deposits, there are NI 43-101/JORC (2004) (1g/t cut-off) compliant Mineral Resources at Dubenski of 59,000 ounces Indicated at 2.28g/t and 18,200 ounces at 1.44g/t Inferred; and NI 43-101/JORC(2012) (1g/t cut-off) compliant Mineral Resources at Dogpaw of 24,000 ounces indicated at 3.02g/t and 4,600 ounces at 2.27g/t inferred.
“The Cameron gold project is a quality asset in a low-risk, favourable mining jurisdiction.
“The transaction preserves our strong cash balance while the low holding costs of the Cameron project provide us with plenty of flexibility in our future development strategy as we continue to look at further complementary transactions targeting high quality projects capable of generating strong cash flow,” Chalice Gold Mines managing director Bill Bent said,.
President of Coventry, Steven Chadwick said the proposed merger with Chalice represents an excellent opportunity to fund the ongoing exploration and potential ultimate development of the Cameron gold project in an extremely difficult economic climate.