PERTH (miningweekly.com) – ASX-listed junior Potash West has inked a binding term sheet with fellow-listed Petratherm to divest of its 55% shareholding in the South Harz project, in central Germany.
Potash West announced on Monday that its East Exploration subsidiary would receive 55-million fully paid ordinary shares in Petratherm, along with 110-million performance shares which would convert to ordinary shares on achieving a predetermined project milestone.
Potash West would receive 30.25-million shares, which were expected to account for 26% of the recapitalised Petratherm.
Petratherm noted that the private owner, which held the balance of the South Harz project, had also agreed to the sale, in exchange for shares.
On the completion of the transaction, Potash West would be allowed to appoint two directors to the Petratherm board.
The South Herz project comprises two exploration licences, Küllstedt and Grafentonna, covering 241 km2 and 216 km2 respectively. Potash was mined within the Küllstedt licence between 1912 and 1924, with three shafts operational during that period.
The mine was placed on care and maintenance as part of a policy of rationalising the potash mining industry, with the mine ultimately closed in 2000.
Potash West MD Patrick McManus said that while the transaction would allow the company to maintain significant exposure to the South Harz project, Potash West could continue to progress its other projects, including the Dinner Hill project, and the development of the K-Max technology.