JOHANNESBURG (miningweekly.com) – ASX-listed Rox Resources has agreed to an exclusivity agreement with listed, but suspended, shell IM Medical, which is interested in buying its 49% interest in the Reward zinc/lead joint venture (JV) project, in the Northern Territory.
Rox owns 49% of the JV with Teck Resources holding the balance. The Canada-based diversified major has an option to increase its interest to 70% by spending A$15-million by August 31, 2018. Teck has already spent about $13.85-million.
The Reward project includes the Teena zinc/lead deposit, which is considered the largest high-grade zinc/lead mineral resource discovered in Australia in the last 20 years.
IM Medical reported on Tuesday that it would offer Rox $2-million in cash and $12.8-million shares for the interest in the JV. Rox would become the major shareholder of IM Medical, owning between 50% and 60% of the issued share capital.
The acquisition of Rox’s interest in the JV will mark IM Medical’s entry into the resources sector, with the company announcing that it intends to build a portfolio of zinc and related projects over time.
The company also confirmed it was in discussions to buy a separate deposit from another party.
IM Medical stated that the zinc market was forecast to show a marked improvement over the next few years, owing to falling supply from mine closures and steadily growing demand.
On completion of the Reward acquisition, IM Medical will seek reinstatement on the ASX.