- Renegade Exploration had agreed to sell its Yukon Project to Scharfe Holdings Inc. on 4 December 2020.
- The parties have now amended the terms of the agreement concerning the payment of the consideration.
- Scharfe has been facing issues in accessing the property in Yukon due to COVID restrictions and related logistics issues.
ASX-listed minerals explorer and developer Renegade Exploration Limited (ASX:RNX) has declared a key development in continuation with the previously announced Share Purchase Agreement (SPA) inked with Scharfe Holdings Inc. for the sale of the Yukon Project.
In the latest development, RNX has agreed to amend the terms of the Share Purchase Agreement with respect to the sale of the Company’s Yukon Project with Scharfe Holdings Inc., which includes an immediate payment of AU$500,000.
RNX’s agreement with Scharfe
Under the SPA, Scharfe was entitled to acquire the Canadian subsidiary of RNX, Overland Resources Yukon Limited. The consideration comprised of cash payments of AU$1,650,000 to RNX and an exploration and development expenditure of around CA$500,000 on the Yukon Project.
RNX had received the first tranche of the cash payment of AU$250,000 on the closing date of the SPA, while subsequent three tranches (AU$300,000, AU$400,000, AU$700,000) were agreed to be paid on 1-year, 2-year and the 3-year anniversary of the closing date, respectively.
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Both parties had also agreed that RNX shall hold a right to a 1% NSR on the Yukon Project once the final payment was made. The NSR is conditional to the achievement of commercial production, and Scharfe can acquire the royalty through payment of AU$ 1 million to RNX.
The operatorship of the Project was assumed by Scharfe on and from the closing date, and Scharfe is responsible for the maintenance of all permits as per the relevant requirements. In case any of the cash consideration payments remain unpaid when due by Scharfe, it was agreed that the transaction might be dismissed, and the Project shall be retained with RNX.
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Amended terms of the SPA
As per the updated terms of the SPA, Tranche 2 and 3 shall be replaced with a payment of AU$500,000 to be made on or before 30 July 2021. Moreover, the last date for the exploration and development expenditure on the project has been revised to 30 November 2023.
If Scharfe is unable to make such expenditure by the said date, a payment of AU$300,000 shall be made to RNX.
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The amendments come because of the issues encountered by Scharfe while accessing the property in Yukon for the ongoing exploration season. The challenges are seen due to restrictions surrounding COVID-19 and related logistics issues.
In light of such challenges, Scharfe approached RNX to amend the terms of the SPA, and RNX agreed to the same as the upfront payment is favourable for its upcoming funding and exploration obligations.
The RNX stock closed at AU$0.007 on 28 July 2021.