Rincon Resources, an Australian mining company, has recently announced a significant agreement with Maverick Minerals Australia. The binding heads of agreement involves the sale of 90% of Rincon’s interest in Lyza Mining, the entity holding the West Arunta Project tenements, to Maverick Minerals Australia.
As part of the deal, Rincon will retain a 10% interest in the project through a joint venture arrangement. This means that Rincon will be free-carried until a decision to mine is made, allowing them to benefit from any future success of the project.
The agreement includes an upfront payment of A$600,000, with A$100,000 to be paid in cash and A$500,000 in Maverick shares. Additionally, there is a deferred consideration of A$500,000, which will be payable in Maverick shares in two tranches. The first tranche of A$250,000 will be due following the completion of an initial drilling program, with the remaining A$250,000 to be paid after the completion of a secondary program at the West Arunta Project.
One of the key clauses in the agreement stipulates that if the joint venture does not commence an initial program within 24 months of completion or complete the secondary program within 36 months, Rincon has the option to buy back shares in Lyza Mining for A$1. This would reduce Maverick’s interest in the project to 25%, with Rincon holding a 75% interest and Maverick maintaining a 25% free-carried interest.
The issue price for the shares is set at A$0.015 each and is subject to approval from Maverick shareholders. The completion of the deal is contingent upon customary conditions precedent, with finalization expected within two months once those conditions are met or waived.
Rincon’s technical director, Michael Griffiths, expressed his satisfaction with the transaction, stating that it represents an attractive outcome for the company. He highlighted the benefits of securing cash and equity consideration while retaining a 10% free-carried interest in the West Arunta Project. Griffiths also mentioned that the deal allows Rincon to focus its funds towards its Telfer South Gold-Copper Project.
In addition to the West Arunta Project, Rincon Resources holds full ownership of three exploration projects in Western Australia that are prospective for copper and gold. These include the South Telfer Project, the Crackerbox Gold Project in the Murchison Gold Field, and the West Arunta Project.
The original article, “Rincon Resources to sell 90% of Lyza Mining to Maverick,” was first published by Mining Technology, a GlobalData-owned brand.
