- Ausmex Mining (AMG) has made plans to sell its Gilded Rose Gold project to PepinNini Lithium (PNN) for $4 million
- The purchase is subject to shareholder approval, a PepinNini capital raise, and due diligence
- Should the purchase go ahead, Ausmex will only receive full payment after Gilded Rose has hit some production milestones
- Ausmex was initially set to sell the project to Chinese company Jin Resources, but the deal fell through in February
- Today, Ausmex shares are trading 2.27 per cent lower for 4.3 cents each
- PepinNini shares have been in a trading halt since April 16 but last closed worth 0.2 cents each
Junior explorer Ausmex Mining (AMG) is still trying to offload its Gilded Rose Gold project, today inking a potential $4 million deal with PepinNini Lithium (PNN).
Ausmex was originally planning to dump the project on China-based Jin Resources. However, things seemed slow-moving with the Chinese company as Ausmex granted several extensions to the settlement date over the last few months of 2019.
Then, in mid-February 2020, Jin pulled out of the deal despite already having paid $200,000 to Ausmex in non-refundable fees for the transaction. Jin said some “ongoing issues” in Hong Kong were to blame for the retreat.
This left Ausmex with a non-core asset on its hands once more, and the company said it was immediately working with other potential buyers for Gilded Rose.
Today, Ausmesx named fellow ASX-listed PepinNini as the latest company to throw out a bid for the gold project.
Strings attached
Similar to the Jin arrangement, PepinNini is offering $4 million for the project, but with some strict conditions in place.
PepinNini will make a $100,000 upfront payment once due diligence on the project is complete. Then, $1.4 million will be paid upon completion of the transaction along with $1 million in PNN shares.
Then, after 18 months, another $500,000 will be paid, bringing the total payment thus far to $3 million. The final $1 million will only be paid to Ausmex once the Gilded Rose project has produced 10,000 ounces of gold — meaning it could be a long time before the full value of the sale is realised for Ausmex.
Further, PepinNini said the purchase is subject to shareholder approval and a $2 million capital raise. The capital raise is also subject to shareholder approval.
Still, Ausmex said the cash payment combined with the company’s current cash on hand will give it enough funding to progress work at both its Mt Freda Complex and its Golden Mile Mining Lease application.
Further, the extra cash will help fund a drilling program at the “exciting” Burra Copper and Gold project in South Australia.
Today’s deal allows for some delays from the COVID-19 pandemic. Currently, neither company has said it expects the virus to impact the purchase.
Ausmex shares are down 2.27 per cent today and worth 4.3 cents each. PepinNini shares have been in a trading halt since April 16 but last closed worth 0.2 cents each.