Buxton Resources (ASX:BUX) has entered into an agreement with privately held Solution Metals to acquire the Matrix Manganese Project in Arizona, US.
The Matrix Project is a low-cost brownfields exploration project covering 12km2. It lies adjacent to the Artillery Peak manganese deposit, which was mined as part of the US government’s strategic stockpile.
Under the earn-in agreement, Buxton, which has a market capitalisation of $19 million, will spend $1 million over a two-year period for 100% ownership.
The company has agreed to issue Solution Metals $150,000 worth of Buxton shares within 20 days after the agreement is executed and a 1.5% net smelter return royalty.
Buxton will also issue Solution a second tranche of $100,000 worth of Buxton shares after two years or on completion of the earn-in arrangement, whichever comes first.
Should Buxton elect to IPO the project, Solution will receive 10% of the new entity’s capital structure and the right to acquire another 9.9%. Alternatively, Solution will receive payments based on certain milestones achieved by Buxton at the project, including the delineation of a resource, completion of a Feasibility Study, and a decision to mine.
Buxton CEO Marty Moloney says the acquisition provides the company with a low-cost option on the high-purity manganese sulphate market which is forecast to grow a multiple of four to six times by 2030.
“The USA currently relies 100% on manganese imports and significant incentives, such as the Biden Administration’s massive Inflation Reduction Act, are available for critical mineral projects,” he says.
“The project is located in a proven manganese province and we’ll be commencing work on the ground in Q3 2024, with drilling designed to test extensions of known manganese mineralisation expected in Q4.”
Buxton Resources is an explorer focused on nickel, copper, gold, iron, and graphite deposits. The company engages in acquisitions, exploration, and evaluation of mining tenements in Australia.
Write to Aaliyah Rogan at Mining.com.au
Images: iStock
