Metallica Minerals Sells SCONI Project for $10M

THE BOURSE WHISPERER: Metallica Minerals (ASX: MLM) has executed a Sale and Purchase Agreement with Australian Mines (ASX: AUC) for the SCONI cobalt-nickel-scandium project in North Queensland.

Metallica Minerals said the $10 million cash and shares sale covers 100 per cent of the project tenements to Australian Mines, superseding a Farm-in and Joint Venture Agreement announced by Metallica in October 2016.

The terms of the transaction include payment of $3.5 million in cash by Australian Mines to Metallica and the issue of $1.5 million worth of Australian Mines shares to Metallica upon the completion of a Definitive Feasibility Study by Australian Mines or by 30 June 2018, whichever comes first.

A further $5 million in cash or issue of more Australian Mines shares following the commencement of commercial production from the SCONI project.

Australian Mines shares issued to Metallica will be subject to a three-month escrow period;

“With Metallica’s focus firmly on the development of the Urquhart bauxite project, the SCONI project has become a non-core asset, which was reflected in the earn-in agreement signed with Australian Mines in 2016,” Metallica Minerals CEO Simon Slesarewich said in the company’s announcement to the Australian Securities Exchange.

“This transaction represents an opportunity for SCONI to be progressed even more effectively, to the benefit of both parties.

“Metallica is set to retain significant exposure to the project by taking equity in Australian Mines and having additional payments linked to commercial production.

“The cash to be received will be used to advance the Urquhart bauxite project and potentially to assist Metallica with its strategic objective of increasing bauxite production to five to seven million tonnes annually, over the next three to five years.”