PERTH (miningweekly.com) – ASX-listed Marindi Metals has signed a letter of intent (LoI) to divest of its Bellary Dome conglomerate gold project, in the Pilbara, to TSX-V-listed Pacton Gold.
Under the LoI, the two companies have agreed to a ten-day exclusivity period, during which the Canadian company would complete a due diligence and finalise a binding definitive sales agreement.
The sales agreement is expected to include a C$2-million cash payment and the issue of more than 10-million common shares in Pacton, equivalent to a fully diluted stake of around 9.9%.
The shares will be subject to a four-month escrow period.
In addition, Pacton will be required to pay C$1-million, or issue shares in an equal amount, both on the 12-month anniversary of the sale, and again on the 18-month anniversary of the sale. If there is a change of control of Pacton, the shares issue will be accelerated, and will be issued before the change of control.
Furthermore, Pacton has agreed to grant Marindi an anti-dilution right on capital raises up to C$10-million, allowing the ASX-listed company to maintain its 9.9% shareholding.
Marindi MD Simon Lawson said on Thursday that the transaction was consistent with the company’s focus on discovering and developing large-scale lithium and gold deposits in Forrestania, where a major drilling programme was currently under way.
“The deal with Pacton has been structured to allow us to realise a significant return from the pioneering work which the Marindi team has put into the Bellary Dome project over the past nine months via an upfront cash payment, through a cornerstone non-diluting 9.9% interest in Pacton, and through milestone payments in Pacton shares or cash.”
Lawson said that Pacton had the funding, focus, and the backing to maximise the value of the Bellary Dome project by drawing on its knowledge of the conglomerate gold potential across the Pilbara.
“If the transaction is completed, Marindi shareholders will crystallise an immediate benefit in the form of cash that can be applied to our lithium and gold exploration programmes at Forrestania, while retaining exposure to the future upside at Bellary Dome through our holding in Pacton.”