Eclipse Metals (ASX:EPM) zooms 20% on Revised NT Project divestment plans - Kalkine Media

Highlights

• Eclipse has amended the binding heads of agreement (HoA) with Oz Yellow Uranium Limited.
• The structure of OZ Yellow’s IPO and the payment consideration to Eclipse towards the proposed transaction have also been revised.
• Eclipse’s Board believes that the divestment of the NT projects would be an excellent opportunity to maximise the shareholder’s value.

Shares of Eclipse Metals Ltd (ASX:EPM) zoomed up 20% following the announcement of the amendment of the binding heads of agreement (HoA) with Oz Yellow Uranium Limited. EPM shares have gained as much as 80% in the past one month.

Earlier, Eclipse had entered into an HoA to divest its stake in certain Northern Territory tenements, including the Ngalia Basin Uranium Prospects and the Liverpool Uranium Project. The proposed transaction envisages Oz Yellow Uranium to undertake an initial public offering to list on the ASX. The newly listed company would be positioned as a pure-play company focusing on highly prospective uranium tenements in the northern territory.

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Eclipse’s Board believes that the divestment of the NT projects would be an excellent opportunity to maximise the shareholder’s value. The transaction would also facilitate Eclipse to focus on its Greenland assets, where the company recently announced substantial high-grade quartz, REE and rare/critical metals results boosting confidence to advance on developing the Ivittuut polymetallic deposit.

Following negotiations with Oz Yellow, both parties have mutually agreed to extend the date of the IPO of Oz Yellow to list on the official list of the ASX to 30 June 2022. The afore-mentioned conditions are required for the proposed transaction. Additionally, the structure of the IPO and the payment consideration to Eclipse towards the proposed transaction have also been revised following a review of the NT projects amid the current market conditions.

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As per the proposed Transaction structure, Oz Yellow will raise AU$6 to AU$10 million through its IPO. The payment consideration to Eclipse will include –

• 42% to 49% fully paid ordinary shares of Oz Yellow upon its listing on the ASX, subject to the amount raised via the IPO. A portion of these shares will be distributed among EPM shareholders on a pro-rata basis.
• 28% to 32% unlisted options of Oz Yellow (on a fully-diluted basis) upon its listing on the ASX, subject to the amount raised via the IPO.
• A cash payment of AU$255,000 along with an additional cash payment of up to $250,000 for all expenditures to be incurred until the completion of the Proposed Transaction.
• A 2% NSR royalty

The transaction will create a new publicly traded, uranium -focused company, which would be led and supported by a dedicated board and management team to explore and develop the NT Projects.

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