Mammoth Minerals (ASX:M79) has entered into an exclusive option agreement to divest its 90% interest in the Paterson Project in Western Australia to Cloudbreak Discovery (LSE:CDL), as part of its strategy to focus on its US projects.
As part of the deal, Cloudbreak will pay a $20,000 cash option fee to secure a two-month exclusive option period. Upon exercising the option, Cloudbreak will issue 300 million shares – valued at $3.1 million – to Mammoth, which will result in the company becoming a 17% shareholder.
Mammoth will also retain a 10% free-carried interest in the project until a Definitive Feasibility Study is completed with a positive net present value.
Executive Chairman Rob Jewson says the divestment is consistent with the company’s vision of being a focused gold and copper explorer in the US, while also having flexibility to monetise its other projects.
“The intrinsic asset value of Mammoth’s portfolio has attracted the attention of numerous parties who have expressed strong interest in projects outside of our core focus, currently at the Excelsior and Bella Projects in the US,” Jewson says.
“With multiple workstreams underway across these exciting high-grade gold assets, we are looking to secure deals that can streamline our portfolio.
“We look forward to partnering with Cloudbreak on the exploration of the Paterson Project. With 888km2 of tenure, proven drill success and proximity to several major deposits, it has all the right ingredients to be a compelling exploration opportunity.”
The Paterson Project, located in the East Pilbara region of Western Australia, has returned multiple copper-molybdenum intersections, including 9m @ 2% copper, 272 parts per million molybdenum from 84m.
Mammoth Minerals is an Australia-based resources explorer and developer focused primarily on its gold and copper projects in the US.
Write to Aaliyah Rogan at Mining.com.au
Images: Mammoth Minerals
