Nelson Resources (ASX: NES) enters SPA to acquire tenements; shares fall

Highlights:

• Nelson Resources Limited (ASX: NES) announced the proposed acquisition of tenements surrounding the Yarri gold project.
• NES and 79 Exploration have inked SPA to acquire 100% of the tenements.
• The acquisition of tenements will grow the footprint of the Yarri project to 8.76km².

The gold explorer Nelson Resources Limited (ASX: NES) decreased by 9.999% and was trading at AU$0.004 on Friday, 19 May 2023, at 12:01 pm AEST after it announced the proposed acquisition of six granted prospecting licenses and two mining license applications (tenements) surrounding NES’ Yarri gold project.

Let’s get apprised of the ASX gold stock-NES latest update in detail.

On Friday, the ASX gold company notified the proposed acquisition of 100% of six granted prospecting licenses, along with two tenements neighbouring the Yarri gold project. It is 140 km northeast of Kalgoorlie.

The tenements have been through a nearly 2,200 metre drilling program since 2017, with reported gold intercepts relative to NES’ drilling activity at the Yarri project, thereby giving scope for a future initial JORC-compliant resource at the project.

Further, NES and its 100%-owned subsidiary, 79 Exploration Pty Ltd, have inked a sale and purchase agreement with Rock Mining Australia Pty Ltd. Through this, 79 Exploration will be enabled to acquire 100% of the tenements via the combination of upfront cash and securities, along with deferred and performance-based consideration. This acquisition will grow the footprint of the Yarri project to 8.76km².

NES’ subsidiary 79 Exploration has the right to acquire a full stake in the tenements conditional on fulfilment of the conditions precedent as follows:

The purchaser conducting due diligence on the tenements within twenty business days from the date of execution of this agreement or such longer period as the parties may otherwise agree in writing (due diligence period) on the terms like in the due diligence period, the vendor consents to cooperate with the Purchaser undertaking a due diligence of the tenements.

The terms include initial payment in cash for AU$35k, issue to the vendor of 25,000K 100% paid ordinary securities in NES (contingent on three-month voluntary escrow.

The performance-based payments consist of with effect on and within two years from settlement, if at least ten exploration drill holes drilled on any of the tenements return assay results of a minimum of 20g gold, NES shall issue AU$50K 100% paid ordinary securities in NES. It will be based on the five-day VWAP to the vendor within 30 business days of the date on which that result is announced to the market.