Highlights
- SRN’s updates on increased MRE at Victory Bore triggered payment obligations to Mutual Holdings Pty Ltd (MH) under an existing agreement related to the Victory Bore acquisition.
- SRN has proposed to issue 350mn fully paid ordinary shares priced at AU$ 0.0008 each, and 350mn partly paid ordinary shares at AU$ 0.0001 each to MH.
- Issuance of equity securities aims to reduce payment obligations to MH by AU $5.6 million upon approval.
Surefire Resources NL (ASX: SRN), a Western Australia-based mineral resources company, on Monday (17 June 2024) informed that it will conduct a shareholders’ meeting to seek the necessary approvals to issue equity securities to Mutual Holdings Pty Ltd (MH) in leu of its payment obligations to the entity.
Payment obligations concerning Victory Bore
Surefire reported an increment in the Mineral Resource Estimate (MRE) at its Victory Bore Tenement (E57/1036) on 1 February 2023. In a second upgrade, dated 05 Dec 2023, it reported increased MRE as part of the pre-feasibility study conducted at Victory Bore.
- 01 Feb - The Victory Bore mineral resource estimate increased by 56% to 235 Million tonnes (Mt) at 0.39% vanadium pentoxide (V2O5)
- 05 Dec - An updated mineral resource of 465 Mt @ 0.30% V2O5, 5.1% TiO2, and 17.7% Fe (Measured, Indicated, and Inferred Resources).
Furthermore, on 08 June, 2023, SRN announced the maiden mineral resource of aluminium oxide at Victory Bore. Each of these announcements led to specific payment obligations to MH, as stipulated in a prior agreement concerning Victory Bore, which the company entered into upon acquiring Victory Bore in April 2019.
Issuance of securities to MH
At a general meeting held on 06 March 2019, SRN's shareholders approved potential payments to MH. The company has previously updated that it plans to settle the due amount through a mix of cash and equity securities, contingent upon obtaining shareholder approval as per ASX Listing Rules and/or the Corporations Act 2001 (Cth). The inclusion of equity payments will better align MH's interests with those of all shareholders. Now, the company’s meeting of shareholders will aim to seek their approval to issue the following equity securities to MH:
- 350,000,000 fully paid ordinary shares each priced at AU$0.008.
- 350,000,000 partly paid ordinary shares at AU$ 0.0001 each (subject to a further call of $0.0079 each).
Upon approval and issuance of all these equity securities, along with subsequent calls on the partly paid ordinary shares being fulfilled, the payments owed to MH would decrease substantially by AU$ 5,600,000.
The shares of SRN traded at AU$0.008 apiece with an uptick of 6.250%, at the time of writing on 17 June 2024.