Savannah's Oman copper divestment concluded
Resource development company Savannah Resources has completed the sale of its stakes in the Block 4 and Block 5 copper projects in Oman to Australia-listed mine development company Force Commodities.
The structure of the transaction enables Savannah to maintain an interest in the projects' long-term economic success, and allows the company to wholly focus its resources on development of the Mina do Barroso lithium project, in Portugal, and the Mutamba mineral sands project, in Mozambique.
"The strategic review we initiated last year looked at a number of options regarding Savannah's ongoing participation in the projects. It concluded that an appropriately structured divestment, which allowed Savannah to retain an interest in the projects' long-term economic success, represented the best outcome available to us.
“The transaction gives Savannah a meaningful shareholding in Force, as well as the potential for cash payments from any future production from the projects,” said CEO David Archer.
Savannah will receive 50-million new fully paid ordinary shares issued by Force, giving the company a 4.9% stake in Force after four-million shares are used to settle some transaction costs. Savannah will receive preferential payment of A$3.5-million in cash from an existing loan out of cash flow generated from production on Block 5.
The company will also receive a payment of a 1.0% net smelter royalty on any future metal sales.
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