Strategic Minerals to Buy Remaining Stake in Central Australia Rare Earths from JV Partner.
M2 EQUITYBITES-May 10, 2017-Strategic Minerals to Buy Remaining Stake in Central Australia Rare Earths from JV Partner
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10 May 2017 - UK-based mineral production and development company Strategic Minerals plc's (AIM: SML) joint venture partner, Rarus Ltd., has agreed to sell its remaining shares in Australian mining firm Central Australia Rare Earths Pty Ltd to SML for GBP 522,500 (USD 677,525), the company said.
This price is to be provided by Rarus subscribing for 19m new shares in Strategic Minerals plc issued at GBP 0.0275 per share.
The transaction is to be completed prior to 1 June 2017.
While CARE will become a 100% subsidiary of SML, Andrew Spinks, the geologist associated with Rarus, has agreed to continued involvement in CARE's various projects through the provision of strategic professional advice, at market rates.
Shareholders are advised that Strategic Minerals chairman, Alan Broome, is also a non-executive director of Rarus and a director of CARE (representing SML's interests) and that, after making the board of Strategic Minerals aware of the CARE opportunity, he excused himself from any further dealings with the acquisition.
While the profitability of operations at our Cobre plant in New Mexico, USA has provided SML the capacity to provide such funding, Rarus may have struggled to source suitable funding in the timeframe SML envisaged for the project.
Accordingly, SML was not prepared to expand the exploration scope while not in full control of the project's expected timeline.
Strategic Minerals is a mineral development and production company with projects in the United States of America, the UK and Australia.
In September 2011, Strategic Minerals purchased its first cash generating asset; the Cobre magnetite tailings dam project in New Mexico, USA which it brought into production in 2012 and which continues to provide a revenue stream for the company.
The portfolio was expanded in January 2016 with the acquisition of shares in Central Australian Rare Earths Pty Ltd, which holds tenements in Western Australia and the Northern Territory that are prospective for cobalt, gold, nickel sulphides and rare earths.
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|Publication:||M2 EquityBites (EQB)|
|Date:||May 10, 2017|
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