ASX-listed Platina Resources is finalising the sale of its wholly-owned Skaergaard project, in Greenland, to Canadian company Eastern Zinc.
Platina will receive C$500 000 in cash and C$7.15-million worth of shares in Eastern Zinc, upon regulatory approvals in Australia and Greenland.
The project hosts a large undeveloped palladium resource, with a significant gold endowment as well.
The transaction makes Platina a major shareholder in Eastern Zinc and it will appoint a director to the company’s board.
Further, Eastern Zinc will be renamed and become a palladium-focused exploration and development company, with further plans to expand its portfolio of palladium assets.
“The challenge for a company our size is that Skaergaard requires a significant capital investment to keep the licences in good standing and advance the project through the drilling and feasibility stages.
“Eastern Zinc has the cash resources and an exploration and geological team based in the northern hemisphere that will be dedicated to developing the project,” says Platina MD Corey Nolan.
The deal will allow Platina shareholders to share in the project’s prospective value increase while providing Platina with an injection of new funding to pursue other opportunities.
The Greenland Mines Department recently renewed the Skaergaard project’s exploration licence for a further three year period to December 2022 and waived all its 2020 tenement expenditure obligations.