Megado Minerals (ASX:MEG) has entered into an agreement to purchase an 80% interest in Iberian Copper, which owns the Iberian Copper Project in northern Spain.
The Iberian Project includes 12 permits covering 956km2 and is located in the North Spanish Oligocene region that saw copper oxide mining activity through to the 1970s.
Under the agreement, Megado will issue 175 million shares to the vendors, as well as 175 million class A performance rights and 175 million class B performance rights.
The performance rights will be converted into shares on a one-for-one basis, subject to achieving mineral resource estimate based milestones.
Megado has also agreed to pay $100,000 to the vendors to cover some of the expenses incurred to date in progressing the project.
Once completed, the vendors will retain a 20% free carry in Iberian Copper until the company’s board makes a final investment decision to begin construction work.
If the vendors do not provide funding pro-rata to their interest in Iberian Copper and their interest is diluted to 10% or less, Megado will have the option to acquire the interest in exchange for granting a 2% net smelter return royalty over the project.
A works program is currently being developed to establish multiple high-priority targets for drilling at the project.
Meanwhile, a non-renounceable rights issue will be conducted on a one-for-two basis at $0.012 per share to raise up to $1.52 million. A total of 127.22 million shares will be issued to participants.
In parallel with the entitlement offer, Megado has secured commitments for a placement of 50 million shares at the same issue price, to be completed in two tranches. The first tranche comprises 38 million shares, while the second tranche comprises 12 million shares, subject to shareholder approval.
Megado Minerals is a mineral explorer focused on its Iberian Copper, North Fork Rare Earth and Cyclone Lithium projects.
Write to Aaliyah Rogan at Mining.com.au
Images: Megado Minerals
