Rox Resources (ASX:RXL) has entered into a binding agreement with Venus Metals (ASX:VMC) to consolidate both parties’ respective interests in the Youanmi Gold Project in Western Australia.
Under the agreement, Rox will acquire Venus’ gold interests in each of its Youanmi joint ventures (JVs), for consideration of 110 million fully paid ordinary shares in Rox, subject to the conditions precedent being met, awarding Rox a 100% interest in the project.
Rox Resources notes it will obtain ownership of all of Venus’ gold interest in its other JVs covering other regional areas, which will see all gold rights held by both companies consolidated under a simplified, single ownership structure, providing a ‘strong’ platform to progress development of the project.
Rox says this new structure will provide greater market appeal and access to capital, which is expected to strengthen value for both Rox and Venus shareholders.
Key terms of the transaction include Venus agreeing to enter into a voluntary escrow deed for a period of 12 months for the 55 million shares it will retain. Additionally, Venus will retain its current net smelter royalty of 0.7% at the OYG JV tenements, and will also have the right to nominate a director to the board of Rox. Venus Managing Director, Matthew Hogan, is the current front runner to join the board at Rox as Non-Executive Director.
Venus is also expected to continue to hold its non-gold interests in the Youanmi JV, Currans Find JV, and Venus Metals JV, as well as its interests in its other projects, other than Youanmi, following completion of the transaction.
Speaking on the consolidation, Rox Resources Managing Director Rob Ryan says: “Consolidating the gold interests under the Youanmi Gold Project under Rox’s ownership is a logical transaction that is expected to deliver compelling value for both sets of shareholders and we are enormously excited about the strong foundation this transaction creates for the project’s ongoing exploration and development. The transaction provides investors and financiers with a clearer ownership structure and access to the full value of the Youanmi Gold Project.
“Consolidating the gold interests under the Youanmi Gold Project under Rox’s ownership is a logical transaction that is expected to deliver compelling value for both sets of shareholders…”
Building on our existing high-grade resource base and our recent exploration success at Midway and Youanmi South, this simplified ownership structure will enable Rox and Venus shareholders to share in the future growth of Rox as we work to unlock the full potential of the Youanmi Gold Project.
2023 is set to be a milestone year at Youanmi, with drilling underway to convert existing inferred resources to indicated status to support the Prefeasbility Studies. We are also very excited to see ongoing results from the Midway and Youanmi South discoveries, which are potential game changers for the Youanmi Gold Project.”
Rox also notes the agreement with Venus retains a mutual break fee of $275,000 payable in certain circumstances whereby the board of that party fails to recommend the transaction, changes, withdraws or adversely modifies its recommendation that shareholders vote in favour of the relevant resolutions for the transaction, or if the party has materially breached the agreement.
Under the agreement between both parties, Rox Resources announces that following completion of the transaction and in-specie distribution, Venus is expected to hold 55 million Rox shares, which when aggregated with the 5 million Rox shares held by Venus’ wholly-owned subsidiary Redscope Enterprises, is expected to represent about 18% of Rox shares.
The Youanmi Gold project is located near Mt Magnet, about 480km northeast of Perth, and is the centre of the company’s current activities as it plans to develop the ‘high-grade’ project into production. The project comprises several tenements, including the OYG JV, the Youanmi JV, Currans Find JV, and Venus Metals JV, of which Venus Metals currently holds a 30%, 45%, and 50% interest respectively.
Rox Resources is an ASX-listed, Western Australian-focused gold exploration company focused on progressing studies into the redevelopment of the Youanmi Gold project, as well as exploring other assets in Western Australia.
Images: Rox Resources Ltd
