- Australian Mines (ASX: AUZ) and Metallica Minerals (ASX: MLM) have come to an agreement on the two royalties that weren’t included in the purchase of the Sconi Project
- Part of the deal will see Australian Mines assuming the royalties, being the Bell Creek and Minnamoolka projects, as long as Metallica reduces the production payment from $5 million to $2.5 million
- Australian Mines is up 6.67 per cent on the market this morning, selling shares for 1.6 cents each
- Metallica’s shares remain flat today and are trading at 1.3 cents each
Australian Mines and Metallica Minerals have come to an agreement regarding the two royalties that were not included in the purchase of the Sconi Project.
On September 18th, Nornico, Metallica subsidiary, was placed into Voluntary Administration because two of its royalty agreements, being the Bell Creek and Minnamoolka projects, weren’t assigned during the Sconi sale to Australian Mines in 2017.
Today, both companies have announced they have entered into a Deed of Settlement, Release and Undertaking.
The deed has released Metallica from all current and potential liabilities and claims in association with the unassigned royalty agreements.
As part of the deal, Australian Mines will assume the royalties as long as Metallica reduces the production payment from $5 million to $2.5 million.
This will be payed once Australian Mines reaches commercial production from the Sconi Project.
The company considers the reduction in the up-front commercial production payment at the Sconi Project to be highly beneficial.
The royalties and payment obligations include – a payment of $1 per tonne for the first 5 million tonnes of ore produced and $2 per tonne for production over 5 million tonnes on the Bell Creek tenements.
For the Minnamoolka tenement a payment of $1 per tonne for the first 500,000 tonnes of ore produced and $1.50 for any production over that amount.
“Following the execution of the Deed by all parties, Metallica and Nornico will no longer be subject to any claim by IRC (International Royalty Corporation),” Metallica told its shareholders.
“Nor will the prior Directors of Nornico and Metallica be subject to any claim by
IRC,” it added.
Australian Mines is up 6.67 per cent on the market this morning, selling shares for 1.6 cents each at 11:55 am AEDT.
Metallica’s shares remain flat today and are trading at 1.3 cents each.