PERTH (miningweekly.com) – ASX-listed Trigg Minerals has struck a deal to acquire the Drummond gold and base metals project in Queensland.
The company has entered into a binding acquisition with unlisted mineral explorer Rush Resources, which holds the exclusive rights to purchase the Drummond gold project in a separate deal struck with ASX-listed Andromeda Metals in October of last year.
Trigg will acquire Rush for a total of 56.66-million shares, which will be issued in two tranches. The first tranche will comprise 38.33-million shares on completion of the deal, and 18.33-million shares subject to an operational milestone of 2 000 m of drilling and a minimum intersection of 20 m at 1 g/t gold being achieved within two years at the Drummond project.
The Rush acquisition is subject to a number of conditions, including Trigg shareholder approval.
Under the deal between Rush and Andromeda, the Drummond project would have been sold for A$250 000 worth of ordinary shares in Rush, conditional on Rush listing on the ASX.
However, rather than a listing on the Australian bourse, Rush will now become a subsidiary of Trigg Minerals through the share sale agreement, with Andromeda to receive shares in Trigg to the value of A$250 000 as consideration of the sale of the Drummond project to Rush, as well as a reimbursement of all expenditure incurred by the company at the project between August 2022 and June 2023, which amounts to A$45 000.
Andromeda will also receive a non-refundable up-front payment of A$27 000 in cash and a cash refund of A$7 500 in respect of the environmental bonds for the project, at the completion of the sale.
“We are excited about the possibilities this new opportunity brings to the company, which adds to our existing Lake Throssell sulphate of potash project in Western Australia,” said Trigg nonexecutive chairperson Mike Ralston.
“We believe it is in the best interests of shareholders at this point to have a more diversified portfolio that can potentially deliver significant value for Trigg while further de-risking our asset base and giving shareholders exposure to metals with attractive fundamentals and leverage to the global energy transition.
“The substantial cash spent historically at the Drummond project by two experienced gold companies provides considerable upfront value for Trigg and allows us to move faster and with more certainty towards an initial drilling programem. Any exploration success near to several world-class gold projects in the region will open further opportunities, including toll treatment. We also like the fact that historical work has also identified base metal potential on these tenements.
“The transaction has provided a catalyst to raise cash to strengthen Trigg’s balance sheet, both in the short term and following deal completion, which is subject to shareholder approval,” said Ralston.