PERTH (miningweekly.com) – ASX-listed DevEx Resources has struck a A$7.5-million agreement with fellow-listed explorer Lachlan Star to divest of its New South Wales copper/gold exploration portfolio.
The agreement covers 11 tenements in the Lachlan Ford Belt, and includes the Junee, North Cobar and Basin Creek projects covering 1 956 km2.
DevEx told shareholders on Thursday that while the projects offered considerable potential for a major porphyry copper/gold discovery, the company’s board had determined that a simplification of its portfolio would allow it to focus its resources and management time on the high-potential Nabarlek uranium project in the Northern Territory, and the recent ionic clay-hosted rare earth element (REE) discovery at the Kennedy project in Queensland.
“DevEx has been a first mover in several of Australia’s exploration hot spots, where we have secured dominant strategic positions in the heart of a number of Tier-1 mineral provinces,” said MD Brendan Bradley.
“The New South Wales projects have delivered exciting early-stage results, however, the reality is that these assets require sustained and focused exploration effort to unlock their full potential.
“In light of the success we have been enjoying at our Nabarlek uranium project, where we have an exceptional opportunity to discover and delineate high-grade uranium resources at a very favourable time in the uranium cycle – and the immense potential of our Kennedy ionic clay-hosted REE project, we believe it is in shareholders’ best interest to focus on these outstanding opportunities.
“This transaction will see the New South Wales assets transferred into a well-backed exploration company where they will become the key focus. DevEx shareholders will retain exposure to the upside as Lachlan Star’s major shareholder, and we expect to have considerable input into the ongoing exploration strategy through representation at board level. This is a great result for DevEx.”
Under the terms of the agreement, the consideration for the New South Wales assets will be paid in Lachlan Star shares, with DevEx to be issued more than 756.7-million shares at a deemed issue price of 1c each, and more than 75.6-million shares at a deemed issue price of 10c each, with the company to hold a 36.46% shareholding in Lachlan Star at the close of the transaction.
In addition, Lachlan Star would also pay a 2% net smelter royalty from any minerals produced within the tenements.
“We are delighted to have reached agreement with DevEx to acquire this extensive and highly strategic New South Wales portfolio as part of a scrip-based transaction that will see DevEx emerge as our major shareholder, post-completion,” said Lachlan Star chairperson Gary Steinepreis.
“DevEx has been a first mover in several of Australia’s premier exploration terranes. The New South Wales portfolio includes the Junee project located in Australia’s copper/gold porphyry heartland and the North Cobar project, located along strike from the world-class Cobar mining centre. The New South Wales projects have delivered exciting early-stage results with a significant amount of drilling already completed. We believe these assets have outstanding potential to yield a world-class discovery and we are looking forward to getting on the ground later this year to start testing the targets identified through our due diligence process.”
The transaction is subject to Lachlan Star shareholders, with a meeting expected in September. The company was also proposing a one-for-ten consolidation of capital.