- Renegade Exploration has agreed to acquire the interest of Sovereign Metals in the Carpentaria JVA, in line with its objectives.
- SVM’s ownership currently stands at 23% as SVM refused to contribute to joint venture expenditure on the tenements.
- The payment for the acquisition shall be made in three tranches extending over a period of 2 years.
- RNX had shown keen interest in the transaction, and there is notable potential to assess opportunities in the tenements under the JVA.
Minerals exploration and developer Renegade Exploration Limited (ASX:RNX) remains in pursuit to evolve into a mid-tier resource company. The Company aims to achieve this milestone through finding, procurement, and advancement of economic mineral land assets.
RNX Acquires Sovereign Metals’ Share in Carpentaria JVA
In line with this objective, RNX has declared its agreement to acquire the Joint Venture Interest in the Carpentaria Joint Venture Agreement (JVA) held by Sovereign Metals Limited (ASX:SVM). Glencore plc’s subsidiary, Mount Isa Mines Limited (MIM), is the other party in the JVA.
RNX has agreed to make the following payments to SVM in consideration for acquiring SVM’s interest in the JVA:
- Payment of $100,000 on completion of the acquisition or issue 15 million RNX shares to SVM as per SVM’s choice
- Payment of additional $100,000 upon completion of one year of the acquisition or issue 10 million RNX shares to SVM at SVM’s choice
- Payment of $150,000 or issue 10 million RNX shares to SVM according to SVM’s choice, upon completion of 2 years of acquisition
Notably, any RNX shares issued to SVN in relation to this acquisition are subject to a trading restriction of three months. Moreover, the parties are entitled to exercise their ability to agree to any of the payment methods mentioned above, including a combination of cash and RNX shares.
Presently, the acquisition remains subject to obtaining all required regulatory approvals to transfer SVM’s interest to RNX. Moreover, MIM has not refused the acquisition of SVM’s Carpentaria JVA interest by RNX, in the instance where acquisition of the Carpentaria JVA interest is not subject to consents of any third-party.
Key Terms of The Carpentaria JVA
RNX has been actively pursuing this transaction and has been aggressively engaged in the same for around five months. RNX believes that this transaction is highly attractive due to the exposure of the JVA to copper and gold in the Cloncurry region of Queensland. Significantly, the initial due diligence indicates the possibility for assessing opportunities that have been traced through historical work across tenements of gold as well as copper prospects.
The permits held by the Carpentaria JVA include Mt Marathon (EPM 8586), St Andrews Extended (EPM 12180), Mt Avarice (EPM 8588), Corella River (EPM 12597) and Fountain Range (EPM 12561).
Important discussion at: ASX:RNX Executes Share Purchase Agreement For Sale of Yukon Project
Inception of JVA and SVM’s Share
Although the Carpentaria JVA was initially formed in 2001, yet SVM acquired its interest in the joint venture in the year 2007. The total expenditure of approximately $14.5 million has been incurred on the Carpentaria JVA, wherein MIM contributed around $11.6 million and SVM contributing $2.9 million over that period.
In due course, SVM chose not to make a further contribution to the expenditure on the tenements of the joint venture which resulted in the declining interest of SVM. Subsequent to the decline, the joint venture interest of SVM was reduced to current levels of nearly 23%.
RNX, however, aims to generate long-term value for its shareholders and seems keen to share the outcome of any discussions with MIM. This could be in relation to the development of any potential opportunities that can be identified.
RNX shares settled at a price of $0.006 with a market capitalisation of $5.17 million on 18 December 2020.