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Formation of Joint Venture Molyhil Project, Northern Territory
Highlights:
- JV formed with IVR completing by spending $1,000,000 on the tenements (Stage 1 commitment) and the transfer of 25% interest in the Molyhil tenements and the sale of Thor’s 40% interest in Bonya tenement EL29701 (Table 1 and 2).
- The initial interest for the parties is 25% Fram and 75% Molyhil.
- IVR will now issue Thor A$250,000 worth of IVR shares upon the formalisation of Fram’s 25% JV interest.
- Fram can opt to continue to earn up to 80% interest by spending up to, a further $7,000,000 on the Tenements via a three-stage process.
- The JV at Molyhil will allow Thor to focus on its priority USA Uranium assets and Alford East Copper-REE Project while retaining a meaningful interest in the Molyhil Project.
Nicole Galloway Warland, Managing Director of Thor Energy, commented:
“The Directors are delighted that the Stage 1 Commitment has been completed and that Fram is progressing with developments on this exciting tungsten/molybdenum deposit. The increase in the mineral resource endowment is underpinning feasibility work at Molyhil.
“The commitment shown by Fram in diligently working through all aspects of this deposit is to be applauded.
“The Molyhil divestment and Bonya sale (EL29701) will support the Company’s focus on its priority US uranium assets, where we see the most significant and nearest-term value potential for Thor’s shareholders.”
Key Transaction Details
Formation of the Joint Venture
Under the execution of the Stage 1 obligations, a JV Agreement was executed between Fram and Molyhil on 13 August 2024 (“JV Commencement Date”). The initial JV interests of the parties are 25% Fram and 75% Molyhil in Molyhil, with the 40% sale of Bonya EL29701 (Table 1 and 2).
Stage 1 Joint Venture Consideration
On the formalisation of Fram’s 25% JV interest, IVR will issue Thor A$250,000 worth of IVR shares at a deemed price equal to the higher of the Volume Weighted Average Price for the 15-day trading period immediately preceding the 25% earn-in date, or A$0.05 per share.
Stage 2 Earn-In
Fram shall, within 28 days of the JV Commencement Date, give Molyhil written notice of its intention to earn a further 26% interest in the Molyhil Tenements (“Stage 2 Earn-In Notice”), bringing its total interest to 51%.
If Fram issues a Stage 2 Earn-In Notice, Fram must spend A$2,000,000 (which amount is in addition to the Stage 1 Commitment) on exploration on or before the third anniversary of the JV Commencement Date (“Stage 2 Commitment”) to earn the additional 26%.
Upon Fram meeting the Stage 2 Commitment, Fram will be entitled to a 51% interest in the Tenements.
Stage 3 Earn-In
Fram shall, within 28 days of the Stage 2 Completion Notice, give Molyhil written notice of its intention to earn a further 29% interest in the Tenements (“Stage 3 Earn-In Notice”), bringing its total interest to 80%.
If Fram issues a Stage 3 Earn-In Notice, Fram must spend A$5,000,000 (an amount additional to the Stage 1 and Stage 2 Commitments) on exploration on or before the sixth anniversary of the JV Commencement Date (“Stage 3 Commitment”) to earn the additional 26%.
Upon Fram meeting the Stage 3 Commitment, Fram will be entitled to an 80% interest in the Tenements.
Project Background
The Molyhil tungsten-molybdenum deposit is located 220km north-east of Alice Springs (320km by road) within the prospective polymetallic province of the Proterozoic Eastern Arunta Block, in the Northern Territory (Figure 1).
As announced on (ASX/AIM: 31 May 2024), Thor reported a revised Mineral Resource Estimate comprising Measured, Indicated, and Inferred Mineral Resources, totalling 4.65 million tonnes at 0.26% WO3 (Tungsten trioxide), 0.09% Mo (Molybdenum), and 0.04% Cu (Copper) using a 0.05% WO3 cut-off.
The Bonya tungsten and copper tenement (EL29701) is located approximately 30km to the northeast of Molyhil (Figure 1). Thor, in JV with Arafura, held a 40% equity interest in the tenements.
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EQR Acquires Leading European Tungsten Producer, Saloro S.L.U., And Secures $25 Million Investment By Oaktree
Highlights:
- EQR agreed binding terms to acquire leading European tungsten producer Saloro S.L.U. from global investment manager, Oaktree
- Transformational acquisition strengthens EQR’s relevance in the global tungsten industry and enhances the Company’s capital market positioning
- As part of the transaction, Oaktree invests $25 million into EQR, through the subscription of 278 million new ordinary shares at $0.09 per share (representing a ~30% premium to the 15 days VWAP)
- Through the combination of operations, EQR becomes the largest tungsten concentrate producer in the Western World, with a robust growth pipeline across two top-tier mining jurisdictions
- The transaction remains subject to various closing conditions, incl. the approval of foreign direct investment agencies both in Australia and Spain
As part of the Transaction, Oaktree will subscribe for 278 million new ordinary shares (“Subscription Shares”) in the Company at an issue price of $0.09 per share (representing a ~30% premium to the 15 days VWAP), amounting to an investment of $25 million. As a result, Oaktree will become a substantial shareholder in EQR with a holding of 15.86% (calculated as of the day of SPA signing) at completion of the Transaction. Oaktree will receive 78 million options, with an exercise price of $0.10 per share, exercisable during the period of 2 years following the date of completion of the SPA (“Options”).
EQR’s Chief Executive Officer, Mr Kevin MacNeill, commented: "This is without doubt an outstanding development and a transformational acquisition for EQR that delivers a huge value opportunity for shareholders. We continue building a robust growth pipeline with the addition of the Saloro operation and considering the exploration ground around the Barruecopardo mine is covering prospective historical workings. Saloro has a great management team which built and commissioned a mine during rough times of Covid and now coming to a stage of sustainable production growth. Our technical and geology teams assessed this opportunity in the recent months and with the installation of their first Tomra XRT sorter we can provide technical assistance to our new colleagues at Saloro to immediately optimise production.”
“We are delighted Oaktree agrees and supports the value proposition of the expanded operation across two jurisdictions through their investment in EQR at a significant premium, demonstrating commitment to the forthcoming value creation journey. We look forward to having a high-profile globally significant fund such as Oaktree, who has been an excellent owner to Saloro, join our share register and support EQR to expand its footprint and strategic positioning in the global tungsten supply chain. We feel this relationship is accretive to our shareholders”, Mr MacNeill said.
Mr Federico Alvarez-Demalde, Managing Director at Oaktree, commented: “We are excited to have selected EQR as partner to acquire Saloro. EQR is a remarkable partner that shares our operational excellence and ESG values, committed to responsible and sustainable practices. This partnership reinforces our conviction about the incredible opportunity presented in the tungsten supply space, and the need to secure sustainable and ESG focused critical metals supply chains. In that capacity, we have found in EQR an excellent team which demonstrated the ability to create lasting value while positively impacting society and the environment.”
STRATEGIC RATIONALE
Through the acquisition of Saloro, EQR adds the leading European tungsten producing mine to its project portfolio, which aligns with the Company’s corporate strategy to become a substantial and globally leading supplier of sustainably produced critical minerals. The expanded scale of operation will further strengthen EQR’s relevance within the global tungsten industry and will enhance the Company’s capital market positioning.
The Transaction provides EQR’s shareholders an exposure to two geographically diverse tungsten operations across top-tier mining jurisdictions and a re-rating opportunity due to enhanced production scale and exploration upside within the exploration permits at Mt. Carbine and Barruecopardo.
Both assets have been de-risked in recent years, now being in an early production stage having a well- established and even complementary customer base with tungsten downstream players in Asia, Europe and North America. Both operations under a combined leadership and complementary expertise will provide cost- saving as well as significant operational synergies. Saloro is in the process of integrating highly efficient XRT Sorters into the process circuit, an area of core competence of EQR. At the same time EQR is currently preparing the ramping up of the Mt Carbine Open Pit Operation, an exercise that Saloro has gone through over the last 3 years as part of their reactivation of the historic Barruecopardo mine.
BACKGROUND ON SALORO S.L.U.
Saloro is a Spanish company dedicated to the production and marketing of tungsten, an industrial metal with a wide range of applications, which the European Union recognizes as a ‘Critical Raw Material’. With a 30-year (renewable) mining license Saloro’s flagship producing asset is the Barruecopardo mine located in the Spanish Province of Salamanca.Barruecopardo has a mining history dating back almost 100 years. Historic activities ceased at the old mine in the early 1980s. After 10 years of preparation including a 15-month construction period, Saloro brought the Barruecopardo mine back online in early 2019 leveraging modern technology after nearly 40 years of shutdown.
Fig.1 - Selected tungsten projects (as of October 2022) across the Iberian Peninsula, with only two operating mines (in blue)
Mining and concentrating activities at the mine are designed to minimise any environmental impact while ensuring a high mineral recovery. Current production is approximately 140 tons/month of high-grade (>65% WO3) tungsten concentrate, with various minor plant expansion projects ongoing for higher recovery and throughput.
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This article includes content from EQ Resources, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.