- Eclipse Metals (EPM) divests its Northern Territory-based uranium assets to Oz Yellow as it shifts its focus to other projects in Australia and Greenland
- The company signs a binding deal with Oz Yellow, who’s paying Eclipse $255,000 in cash as well as a four per cent net smelter return royalty
- Oz Yellow is focused on exploration in the Northern Territory and aims to raise $20 million through an IPO and is seeking to be admitted to the official list of the ASX
- Upon Oz Yellow listing on the ASX, Eclipse will receive 60 per cent of its shares to maintain exposure to the NT projects
- Company shares are down 3.85 per cent to trade at 5 cents
Eclipse Metals (EPM) and Oz Yellow Uranium have signed a binding heads of agreement regarding Eclipse’s Northern Territory assets.
Eclipse has agreed to sell its interests in the Ngalia Basin uranium prospects (two granted tenements and six tenement applications) and the Liverpool uranium project so it can focus on its Greenland mineral assets.
The sale does come with some conditions including both parties obtaining all shareholder and regulatory approvals, Oz Yellow raising at least $20 million at 20 cents per share under an initial public offering (IPO) and the ASX granting approval for Oz Yellow to be admitted to the official list of the ASX.
Upon Oz Yellow’s listing on the ASX, Eclipse will receive 60 per cent of fully paid ordinary shares in Oz Yellow, of which half will be distributed in-specie to Eclipse shareholders. This will allow Eclipse Metals and its shareholders to maintain exposure to the NT projects through its equity interest in Oz Yellow.
OZ Yellow will pay Eclipse a consideration of $255,000 in cash as well as a four per cent net smelter return royalty. Further, eligible Eclipse shareholders will have the opportunity to increase their exposure to the NT projects by participating in a top-up offer which will be included as part of Oz Yellow’s IPO.
Oz Yellow expects to lodge a prospectus in February 2022.
Eclipse Executive Chairman Carl Popal said the divestment will allow the company to focus its efforts on other projects, including the flagship Ivittuut project in Greenland.
“The successful divestment of Eclipse’s non-core uranium assets will be a significant step forward to our strategy that will allow the company to focus its resources – both financial and technical – on key assets in Greenland and Australia,” he said.
“The divestment will deliver to Eclipse a significant shareholding and board representation in a cashed-up entity that has the sole focus of exploring and developing uranium exploration ground in the Northern Territory.”
Company shares were down 3.85 per cent to trade at 5 cents at 12:46 pm AEDT.