PERTH (miningweekly.com) – ASX-listed Broken Hill Prospecting and fellow-listed Cobalt Blue Holdings have inked a binding heads of agreement that would allow Cobalt Blue to obtain full ownership of the Broken Hill, or Thackaringa, cobalt project, in South Australia.
In early December last year, the two companies agreed to terms that would allow for the dissolution of a joint venture, in which Broken Hill held a 30% share and Cobalt Blue a 70% interest.
Under the terms of the agreement, Broken Hill will receive A$500 000 in cash and nine-million fully paid shares in Cobalt Blue, valued at 15c each, as well as a A$1-million three-year convertible note with an interest rate of 6% a year, and a conversion price of 20c each.
Broken Hill will also receive a A$3-million five-year promissory note, interest free for the first three years, with a 6% interest over the remaining period.
Broken Hill on Friday told shareholders that the tenements have now been transferred to Cobalt Blue, allowing the company to progress and commercialise the Thackaringa project efficiently.
“We are delighted that we have been able to transfer our interest in the Thackaringa project to our partners, and yet retain an interest as a shareholder and royalty holder,” said Broken Hill chairperson Creagh O’Connor.
“We believe that unifying the project under Cobalt Blue management is the best step for both companies. This transaction also significantly underpins the value of Broken Hill shares and its current rights issue.”