Red River buys Kagara copper assets
PERTH (miningweekly.com) – Junior Red River Resources has signed an exclusivity agreement with embattled miner Kagara over its copper assets in Queensland.
Under the terms of the exclusivity agreement, the Southern Region copper assets would be sold to Red River for A$6.5-million, subject to shareholder approval.
Some A$3.5-million of the purchase price would be paid in cash, with Red River also issuing a secured convertible note of A$1.5-million, convertible at Kagara’s election at a rate of 10c each, within two years of the date of issue.
An interest rate of 7.5% would be payable on the secured convertible note, in either cash or shares.
Furthermore, a deferred cash payment of A$1.5-million would be made three moths after the start of commercial production from the Southern Region assets, along with a 1.5% net smelter royalty return on the production from these assets.
Kagara went into liquidation at the end of last year, with administrators divesting of assets. ASX-listed Mungana Gold has signed a A$15-million deal with Kagara to obtain the Chillagoe base metals and gold assets, in Queensland, from Kagara, the cornerstone asset of which was the high-grade King Vol zinc deposit.
The most recent transaction with Red River was subject to a number of conditions, including Kagara gaining consent from Investec Bank, the completion of a due diligence and Red River securing the necessary funding.
Red River told shareholders on Thursday that the proposed transaction with Kagara had the potential to transform the junior into a newly-focused base metals company.
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