Platina Resources (ASX:PGM) informs about sale of scandium project for US$14 million, shares soar

Highlights

• Platina Resources is into advancing early-stage metal projects, and creating value by either sale, joint venture or development.
• The scandium project is in central NSW, and the company had discovered the resource in 2011 as part of a platinum and Ni/Co exploration program.
• This transaction is set to benefit shareholders with injection of funding for the company’s gold portfolio, managing director of PGM commented.

Platina Resources (ASX: PGM), the Australia-based metals exploration company with gold projects in Western Australia and scandium project in New South Wales, has informed about the sale of its scandium project to Rio Tinto EN21 Op Co Pty Limited. The latter company is a wholly owned subsidiary of Rio Tinto Ltd.

PGM is expected to realise up to US$14 million from this sale, which is equivalent to approximately AU$21 million, as per the company's announcement.

Platina's Managing Director Corey Nolan has commented that this transaction is congruent with the company's strategy of advancing projects and monetising at the right time.

Source: PGM ASX announcement dated 28 April 2023

PGM shares soar

Triggered by the update, Platina Resources’ ASX-listed shares gained over 15% to trade at AU$0.030 in the early hours of 28 April 2023. The company has a market cap of over AU$16 million.

The development

PGM discovered the asset 12 years ago as part of its platinum and Ni/Co exploration program and advanced it through various studies. Now, the company has unlocked value in its wholly owned scandium project by signing a binding sale agreement with Rio Tinto. PGM says the sale is expected to help it realise up to approximately AU$21 million in cash. It has also informed that the transaction between PGM and Rio Tinto is subject to final regulatory approval.

On closing, PGM will be in receipt of US$8 million cash (approximately AU$12 million) less a warranty retention payment of US$1 million, which the buyer would re-pay after 30 months. The company is also expected to receive future cash payments amounting to US$6 million (approximately AU$9 million) in the event the buyer achieves project milestones that include granting of a Mining Lease.

Statement by PGM MD Corey Nolan

The Managing Director has lauded the development, which he says is in line with the company's strategy of enabling projects to achieve optimal scale and speed up returns to Platina's investors. He also recalled the works done by Platina on the project, which helped in its recognition as one of the largest and highest-grade deposits of scandium globally.

Mr Nolan has further said that the sale is the final step of the company's transition from platinum and specialty metals to its gold portfolio.

Source: PGM ASX announcement dated 28 April 2023

Notably, Platina's gold projects include Brimstone, Mt Narryer and many more. It also has investments in companies including Major Precious Metals, and Alien Metals for exploration of precious and base metals.