- Eclipse has executed a binding Heads of Agreement to conditionally divest its equity stakes in certain Northern Territory assets to Oz Yellow Uranium Limited.
- Oz Yellow Uranium Limited plans to undertake a fully underwritten Initial Public Offering (IPO), seeking to raise at least AU$20 million to facilitate admission to the ASX.
- Under the transaction, Eclipse will be entitled to 60% of all fully paid ordinary shares of Oz Yellow once it lists on the ASX.
Shares of Eclipse Metals Ltd (ASX: EPM) traded ~4% higher to close at AU$0.054 a share following the announcement related to the sale of certain Northern Territory assets. The company has updated regarding the execution of a binding Heads of Agreement to conditionally divest its equity stakes in Ngalia Basin Uranium Prospects and the Liverpool Uranium Project to Oz Yellow Uranium Limited.
Eclipse’s strategy and focus on Greenland projects
The significant announcement followed the company’s strategic decision to focus on Greenland assets. The company has been continuously advancing on its Greenland development plan and had been assessing ways to generate the best value from its existing projects for shareholders. The company had been undertaking a review to potential reposition its assets and ensure that the exploration and development focus is maintained for the Ivittuut Project.
Ngalia Basin assets Source: Eclipse Metals company announcement 29 November 2021
The sale of the Northern Territory to Oz Yellow seems to align well with the company’s growth strategy. Further progress on Eclipse’s plan would be shared in due course.
The sale of the NT projects is contingent on a number of conditions precedent, including the approval of all shareholders and regulatory authorities and many others. The other party, Oz Yellow Uranium Limited, plans to undertake a fully underwritten Initial Public Offering (IPO), seeking to raise at least AU$20 million to facilitate admission to the ASX.
OZ Yellow plans to lodge its prospectus for the IPO listing in February 2022. Under the AU$20+ million IPO, the shares would be offered at an issue price of AU$0.2 a share with an AU$2-million separate top-up offer exclusively for Eclipse shareholders.
Under the transaction, Eclipse will be entitled to 60% of all fully paid ordinary shares of Oz Yellow once it lists on the ASX, of which half will be distributed among Eclipse’s shareholders in proportion to their existing EPM shareholding.
This way, Eclipse and its shareholders would still maintain significant exposure to the NT Projects. Also, the company would also receive a cash payment of AU$255,000 from Oz Yellow along with a 4% NSR royalty.