- VRX Silica to sell its Biranup Nickel and Gold Project to New Energy Metals, eyeing to focus on becoming a global high-quality silica sand producer.
- VRX will receive over 6.25 million ordinary fully paid shares in NRG and cash payments upon achievement of agreed milestones.
- VRX is pleased to execute an agreement on the terms that would enable it to share in any future exploration success.
In a significant development, VRX Silica Limited (ASX:VRX) has announced sale of its 100 per cent owned subsidiary and holder of Biranup nickel and gold project, Ventnor Gold Pty Ltd (VGPL) to New Energy Metals Limited (NRG).
VRX Silica has entered into a conditional agreement with NRG, which is a non-listed public company eyeing an ASX listing and an IPO later this year. NRG has indicated that it will offer priority to VRX Silica shareholders for IPO applications.
The sale of Biranup Project to NRG will allow VRX Silica to focus on its explicit objective of becoming an international supplier of high-grade silica sand.
Following the release of announcement, VRX stock traded ~10 per cent higher around mid-day to $0.100.
Key Terms of Conditional Agreement
Under the conditional agreement, NRG will acquire the Biranup Project via the purchase of 100 per cent of VGPL’s issued share capital. Consequently, VRX Silica will receive over 6.25 million ordinary fully paid shares in NRG and cash payments upon achievement of agreed milestones.
The sale consideration involves:
- Issue of 6,250,000 fully paid ordinary shares in NRG at a deemed issue price of 20 cents at completion.
- Cash milestone payments of:
- $200,000 following determination of a JORC compliant inferred resource of at least 7.5mt at a grade of 0.5% copper and 2% nickel on the land containing the tenements;
- $200,000 at the finalisation of a feasibility study relating to Biranup Project, exhibiting an ability to operate it as a commercially feasible enterprise; and
- $500,000 at the first commercial extraction of any form of mineral products, minerals, ore or concentrates from Biranup Project.
The completion of sale of Biranup Project to NRG is also subject to and contingent upon certain conditions as highlighted below:
Know About High-Grade Biranup Project
Comprising a total project area of 393 sq. km, VRX Silica’s Biranup Project includes six granted tenements that do not have Native Title claims or pastoral lease. However, the project encompasses a region hosting different mineralisation styles.
The project is located in the high-grade Albany - Fraser Orogen area in WA (Western Australia), that hosts the top-notch ~10Moz Tropicana Gold Deposit and IGO’s Nova nickel mine. The highly prospective area is also the subject of a much-anticipated drilling program presently being undertaken by Legend Mining.
It is imperative to note that nickel sulphide focused exploration company, NRG also has an exposure to the high-grade Albany Fraser Oregen area and South West Yilgarn. Besides, NRG retains an exclusive nickel sulphide prospectivity database to create further projects.
Work Undertaken by VRX Silica at Biranup Project
VRX Silica has discovered the potential for base metal mineralisation at Biranup Project. The Company has effectively drilled and intersected nickel and copper sulphides on a structurally controlled geophysical target at the Fire Dragon Prospect.
Besides, VRX has compiled a regional geophysical and geological dataset that is available to:
- initiate a rigorous targeting exercise over the current and recently acquired tenements, and
- guide any further tenement acquisition.
The dataset compiled by VRX Silica is likely to offer an ideal start to NRG to progress development at Biranup Project.