- Renegade Exploration Limited has finalised and executed the Share Purchase Agreement with respect to the sale of its Yukon Project.
- RNX has received the first tranche of the consideration worth AUD250,000, comprising the non-refundable deposit of AUD20,000.
- After the final payment is made, RNX shall hold a right to a 1% Net Smelter Royalty on the Yukon Project, subject to the attainment of commercial production.
Exploration and development company, Renegade Exploration Limited (ASX:RNX) had signed a Letter of Intent (LOI) for the potential sale of its Yukon Project in October 2020 with Scharfe Holdings Inc. The sale was then subject to due diligence and negotiation of a Share Purchase Agreement to acquire Overland Resources Yukon Limited, the Canadian subsidiary of RNX.
In the latest development, RNX has concluded and executed the Share Purchase Agreement. This marks the formalisation of the Letter of Intent that was inked with Scharfe Holdings Inc in connection to the sale of its Yukon Project.
RNX has received an initial payment of AUD250,000, comprising the non-refundable deposit of AUD20,000 which is payable to RNX upon signing of the LOI. As a result of the Share Purchase Agreement, RNX can now acquire Overland Resources Yukon Limited for total consideration consisting of AUD1,650,000 in cash payments to RNX and a commitment of CAD500,000 to be spent as exploration and development expenditure on the Yukon Project before 31 December 2021.
The cash payments payable to the Company in the following four tranches:
- AUD250,000 to be paid in cash on completion of the sale
- AUD300,000 to be paid in cash on the 12-month anniversary of the Closing Date
- AUD400,000 to be paid in cash on the 24-month anniversary of the Closing Date
- AUD700,000 to be paid in cash on the 36-month anniversary of the Closing Date
Out of these four tranches, RNX has received the first tranch. Once the final payment is made, RNX shall hold a right to a 1% Net Smelter Royalty (NSR) on the Yukon Project. This remains conditional to commercial production being achieved while Scharfe has an option to acquire that royalty by paying AUD1 million to RNX.
Scharfe shall assume the operatorship of the Yukon Project on and from the Closing Date. Moreover, Scharfe shall be responsible for the maintenance of all permits according to the related requirements.
It is worth noting that the transaction shall be terminated if Scharfe fails to meet any of the cash consideration payments when due and subsequently, RNX shall be entitled to retain the Yukon Project. Moreover, Scharfe has the option to pay the outstanding Tranches at any time in advance of the 36-month anniversary date.
RNX share price quoted at AUD0.007 with a market capitalisation of AUD6.03 million on 07 December 2020.