Ragnar Metals seeks to handball subsidiary to BHP in $9.8 million deal

Ragnar Metals (ASX:RAG) has signed a conditional sale and purchase agreement to dispose of its subsidiary, Ragnar Metals Sweden AB, to BHP Metals Exploration for $9.8 million. 

The company says the sale includes tenements and exploration licences over the Tullsta Nickel Project in Sweden and is expected to be completed by 30 September 2023, with the $9.8 million to be paid by BHP Metals Exploration — a subsidiary of mining giant BHP Group (ASX:BHP) — on completion. 

Ragnar reports a deferred consideration in the form of a 1% net smelter return royalty will be payable to Ragnar upon the start of commercial production. The purchaser has the option to buy out the royalty for a further $10 million.

The divestment of these assets is noted to provide ‘significant’ funding for Ragnar as it seeks to further its other critical mineral interests in Sweden.  

Conditions of the sale include Ragnar ensuring that its subsidiary has available cash of SEK$2.122 million (A$300,000) at completion, as well as settling all shareholder and intercompany payables and receivables prior to completion. 

Other conditions include Ragnar completing a restructure to transfer the licences held by the company to its subsidiary and, for a period of 3-years after completion, procure that it and its related bodies corporate and agreed affiliates do not apply for or acquire all or any part of any exploration licence, mining tenement, or other title or right within an area of interest adjacent to the licences without the prior written consent of the purchaser.   

With both parties now entered into a conditional sale and purchase agreement, Ragnar announces the sale is subject to the satisfaction of conditions. 

Commenting on the sale, Ragnar Metals Executive Director Eddie King says: “The sale of Ragnar Metals Sweden AB, with the foundation Swedish licences, to BHP, validates the company’s original strategy and the potential of the Tullsta Nickel Project. This transaction provides exceptional value for the company, with a substantial initial cash injection and exposure to production through the royalty. 

This transaction provides exceptional value for the company…”

I am excited to continue working with BHP to finalise the transaction and then re-direct our attention to exploring further critical mineral opportunities in Sweden.”

Ragnar Metals is an ASX-listed company with an ‘impressive’ portfolio of ‘highly prospective’ nickel, copper, and gold assets across Sweden. The company aims to become a profitable mining company, taking ‘robust’ projects through to mining or realising their value at optimal times through merger and acquisition programs.  

In Scandinavian lore, Ragnar Lodbrok was a Viking hero, as well as a Swedish and Danish king known for his exploits.

Write to Adam Drought at Mining.com.au

Images: Ragnar Metals Ltd
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.