Meteoric Resources (ASX:MEI) has terminated the term sheet for the sale of the Juruena Gold Project in Brazil following acquirer Keystone Resources missing the payment deadline for the final tranche payment of USD$17.5 million.
As a consequence of the missed payment deadline and access to said capital, Meteoric is assessing other options regarding funding its Caldeira Project, which the proceeds from the Juruena sale had been earmarked for.
On 3 June 2022, Meteoric executed a binding term sheet for the sale of its Juruena Gold Project in Brazil to Keystone Resources. On 4 October, the first tranche payment of USD$2.5 million cash was received from Alchemist Investments, which is the parent company of Keystone Resources.
Meteoric at the time reported there were then delays to completing the sale, which was related solely to satisfying the restructuring pre-condition on the terms for the second and USD$17.5 million final tranche payment, which had been extended to be received on or before 31 March this year.
However, when the March payment deadline came Meteoric Resources received notice from Keystone advising that it was unable to make payment on the due date. Furthermore, Meteoric says Keystone did not provide any commitment as to when it would be able to pay the outstanding US$17.5 million.
Meteoric reports the company was ‘ready, willing, and able’ to discharge its remaining obligations to Keystone. The company reiterates as the vendor, it is not in breach or default of any of its obligations under the term sheet.
Meteoric was ‘ready, willing, and able’ to discharge its remaining obligations to Keystone
As a consequence of the failure by Keystone to pay the US$17.5 million when due combined with the statement from the potential buyer that it did not know when it would be able to pay that amount, Meteoric formed the view that Keystone had repudiated the term sheet.
The company has reserved all of its rights regarding the actions of Keystone.
With completion of the ‘high-grade’ Caldeira REE project acquisition imminent, Meteoric is now undertaking a capital raising so as to enable it to meet its completion obligations and provide sufficient working capital to accelerate the exploration and development of the Caldeira Project.
This capital raising was not otherwise contemplated at this time and is a direct result of the breach by Keystone, Meteoric says.
The Juruena Gold Project is located in Brazil’s Mato Grosso region and currently boasts a JORC 2012 compliant global Mineral Resource Estimate (MRE) of 1.9Mt @ 387,000oz Au at 6.3g/t comprising three separate by adjacent gold deposits. The three deposits are reported to remain open at depth and are prospective for gold and copper-gold mineralisation, with potential to further increase the project MRE.
Write to Adam Orlando at Mining.com.au
Images: Meteoric Resources Ltd
