Impact Minerals (ASX:IPT) has now signed a formal share sale and purchase (SPA) agreement for up to 75% of its Commonwealth Project in New South Wales, to Burrendong Minerals.
As part of the agreement, previously announced in August 2022, 51% will be under the SPA, and the remaining 24% will be under a earn-in joint venture (JV) agreement.
Impact, which has a market capitalisation of $37.24 million, will receive $275,000 cash and 12.5% of the total issued capital of Burrendong.
Under the agreement, Impact shareholders also have a priority entitlement to subscribe for up to $2 million worth of shares under Burrendong’s initial public offering (IPO).
Upon listing, Commonwealth will operate under an incorporated JV, whereby Burrendong may acquire a further 25% interest by sole funding exploration until the earlier of the first $5 million of expenditure within 36 months of the SPA completion or decision to mine.
The company notes that if Burrendong achieves its full 75% interest in the Commonwealth project, Burrendong is granted a call option to acquire the remainder of the interest in the project for its fair market value and a customary 2% net smelter royalty (NSR).
Impact Managing Director Dr Mike Jones says the SPA with Burrendong, which has raised seed capital to fund an IPO, will allow the company to retain a ‘large’ percentage of the Commonwealth project.
“Impact’s modus operandi has always been to hold large ground holdings in very prospective parts of Australia, and we have significant projects at Commonwealth in the prolific Lachlan copper-gold district, Broken Hill where we almost surround the giant Broken Hill mine and Arkun in the emerging mineral province of southwest Western Australia.
However, as we continue to successfully progress through the Prefeasibility Study on our Lake Hope High Purity Alumina Project in Western Australia, it is only appropriate that we look to maximise the value of our other projects.
We look forward to supporting Burrendong as they progress towards an IPO and given Impact’s shareholders have a priority entitlement to apply for shares, shareholders are welcome to register their interest against this announcement on our Investor Hub.
We are also fielding interest from a number of parties for our Broken Hill project and will look to undertake first pass drilling at Arkun for rare earth elements, copper, and nickel in the next quarter.”
The Commonwealth project covers a 565km-square area in the northern part of the Lachlan Fold Bet in New South Wales.
Impact Minerals is an Australian mineral explorer focused on making ‘major’ discoveries in the ‘world-class’ terranes.
Burrendong Minerals is focused on hunting for ‘giants’ in the Lachlan Fold Belt in New South Wales. Impact Minerals is poised to take a 20% cornerstone position in the company’s proposed upcoming IPO, with priority rights to shareholders.
The company is raising $6 million to $8 million in its IPO to fund deeper drilling and regional exploration of high grade copper/silver/gold/rock occurrences and consider immediate mine development options.
Write to Aaliyah Rogan at Mining.com.au
Images: Impact Minerals
