THE BOURSE WHISPERER: Royal Resources has completed the sale of the Warriedar Iron Ore Joint Venture (WIOJV) to Gindalbie Metals.
Gindalbie’s offer for Royal’s 40 per cent interest in the WIOJV had originally been for a consideration of $8 million cash.
The offer was for all of Royal’s holdings in the area of the WIOJV ground, inclusive of Royal’s residual 40 per cent interest in the Warriedar Gold Joint Venture (WGJV).
A spanner was thrown into the works of the transaction by Minjar Gold, the holder of a 60 per cent interest in the WGJV.
Minjar subsequently decided to exercise its pre-emptive right over Royal’s interest for a consideration of $1 million cash, which reduced Gindalbie’s payment to $7 million.
Minjar’s buy-out of the WGJV is yet to be completed.
Royal said the completion of the transaction had been delayed as it awaited legal advice in regard to Minjar’s claim that it had a pre-emptive right over the WIOJV as well.
Senior counsels have advised both Royal and Gindalbie that Minjar’s claim is without merit.
“This asset disposal will allow Royal to focus on advancing our flagship Razorback iron project in South Australia,” Royal resources managing director Marcus Flis said in the company’s announcement to the Australian Securities Exchange.
Royal Resources Razorback location. Source: Company web site
Royal owns 100 per cent of the Razorback iron ore project, which is a magnetite deposit located 240 kilometres from Adelaide.
The project has an exploration target size of 4,800 million tonnes to 8,000 Million tonnes at grades of 18 per cent to 45 per cent iron.
The Razorback project is divided into two sub-projects: the northern Red Dragon project, and the southern Pualco project.
Collectively, the two areas cover over 1,450 square kilometres of exploration tenement through either outright ownership or an exclusive option over the iron rights.