PERTH (miningweekly.com) – Magnetite developer Magnetite Mines has signed a framework agreement to acquire privately held Lodestone Equities, which holds iron-ore rights and tenements in South Australia.
The framework agreement gave Magnetite Mines an exclusive period to negotiate a share sale and purchase agreement for Lodestone until the end of December; however, the transaction was expected to be settled in the third quarter of this year.
Should the agreement be executed, the takeover will happen by way of a share issue, and will result in Lodestone shareholders holding a 51.5% stake in the company.
At the completion of the takeover, Lodestone’s only shareholder, Coffee House Group, will have the right to nominate up to two additional directors to the Magnetite Mines board.
Meanwhile, until the earlier of the completion of the transaction or the expiry of the framework agreement, Magnetite Mines will provide geological management services for all Lodestone's exploration licences in order to maintain those licences in good standing, as well as cover any additional costs by Lodestone subsidiary Braemar Infrastructure to continue the development of its infrastructure solutions.
The company has also agreed to pay Coffee House Group’s and Lodestone’s costs and expenses for the transaction, prior to the completion of the transaction.