CuFe (ASX:CUF) has entered a binding agreement with entities associated with its major shareholder Gold Valley Group (GVG) to acquire the remaining 40% joint venture (JV) interest in the JWD Iron Ore Project.
As part of the deal, CuFe will also restructure various other obligations that exist between the parties with respect to the Tennant Creek JV and the Yarram JV.
The company reports the key components of the agreement and transaction include assignment of Gold Valley’s remaining interest in the JWD iron ore rights, and CuFe will be assigned Gold Valley’s 40% interest in the iron ore rights for the JWD Iron mine to move to 100% ownership of the iron ore rights
In consideration for the assignment of Gold Valley’s 40% interest, CuFe will issue 150 million shares to Gold Valley and refund it for historical joint venture cash contributions made by under the JWD Joint Venture ($1.32m contributed to 31 December 2022).
The effective date for the transaction and determining the cash consideration is deemed to be 1 January 2023. The $1.32m payable will be adjusted by cash paid by Gold Valley offset by amounts paid under the JWD JV, subsequent to the effective date and prior to completion of the transaction.
CuFe reports that the issue of consideration shares will result in Gold Valley’s relevant interest in CuFe increasing from about 19.84% to 35.38%.
Upon completion of the assignment, the 60:40 JV between with respect to the JWD iron ore rights will be terminated and CuFe will retain 100% beneficial interest in the JWD iron ore rights.
The parties have agreed to settle CuFe’s obligation to pay the $2.25m exercise price by transferring 5% of CuFe’s current 60% interest in the Tennant Creek JV to Gecko Mining Company which presently owns the remaining 40% interest in the Tennant Creek JV.
“Given our positive outlook on the iron ore price for 2023 it makes sense for us to maximise our exposure to it via increasing our ownership in JWD”
Addressing the deal, CuFe Executive Director Mark Hancock says: “Given our positive outlook on the iron ore price for 2023 it makes sense for us to maximise our exposure to it via increasing our ownership in JWD. In addition to the JWD acquisition this holistic transaction with Gold Valley Group has the benefit of preserving cash by facilitating the settlement of an upcoming financial obligation via an asset swap for a small portion of our
Tennant Creek Joint Venture interest and deferring our Yarram financial obligations. While the primary focus of this transaction is JWD we remain excited by the potential of both Yarram and Tennant Creek, with announcements expected in the near future on the mineral resources at both those projects. We thank the Gold Valley Group for their co-operation with this transaction and for their ongoing support of CuFe.”
CuFe is an emerging copper and iron ore company focused on near-term, high-grade premium product iron ore projects and maintaining exposure to strategic metals. The company has interests in various projects and tenements prospective for iron ore, copper and gold, all located in Australia. The company started shipping from the Wiluna West JWD deposit in October 2021.
Write to Adam Orlando at Mining.com.au
Images: CuFe Ltd
