THE BOURSE WHISPERER: Rox Resources (ASX: RXL) informed the market that it had received confirmation from Teck Australia it would be exercising its pre-emptive right to purchase of Rox’s minority interest in the Reward zinc project in the Northern Territory.
By signalling its intention to do so, Teck took out a previous offer Rox had received from Marindi Metals (ASX: MZN).
Under the terms of an Earn-in and Joint Venture Agreement (JVA) between Rox and Teck, Teck retained a pre-emptive right over Rox’s interest in the project, which meant Rox was obliged to offer to sell its interest in the Reward project to Teck under the pre-emptive right.
“Monetising our interest in the Reward project represents a successful outcome for our shareholders,” Rox Resources managing director Ian Mulholland said in the company’s announcement to the Australian Securities Exchange.
“This shows that the market was significantly under-valuing the project and validates our decision to sell.
“Rox will now review our strategic options with a focus on generating new growth and value opportunities.”
Subject to the finalisation of a definitive asset sale agreement, Teck raising funds to complete the acquisition, and satisfaction of a number of conditions consistent with the Marindi Offer, Teck will acquire Rox’s interest in the Reward project on the following terms:
Cash of $8 million;
Immediately tradeable, un-escrowed shares in any ASX or TSX-listed company to a value of $3.6 million or, alternatively $2.6 million cash;
A three year promissory note with a face value of $5.25 million; and
A deferred payment of $3.75 million, payable on completion of a bankable feasibility study, or the expiry of six years, whichever comes first.