Join our daily newsletter At The Bell to receive exclusive market insights
- Platina Resources (PGM) has struck a deal with Canadian-based Eastern Zinc Corporation to sell Skaergaard in Greenland for CAD$7.65 million (roughly A$8.29 million)
- CAD$7.15 million (roughly A$7.75 million) of the consideration for the palladium and gold project will be paid in Eastern Zinc shares, making Platina a major shareholder and securing it the right to a seat on the Eastern Zinc’s board
- The buyer will then change its name as it makes a pivot to focusing on palladium and looks to expand its assets accordingly
- Platina Managing Director Corey Nolan said Eastern has sufficient capital and technical teams based in the northern hemisphere to advance Skaergaard
- Platina shares closed flat today at 2.5 cents per share
Platina Resources (PGM) will sell its Skaergaard project in Greenland to Eastern Zinc Corporation for CAD$7.65 million (roughly A$8.29 million).
Canadian-based Eastern Zinc will pay CAD$500,000 million (roughly A$541,780) in cash and 55 million shares at 13 cents each, equating to CAD$7.15 million (roughly A$7.75 million). This will make Platina a major shareholder in Eastern Zinc and secure it the right to a seat on the board.
Eastern Zinc will then change its name as it pivots to focus on palladium exploration and development and looks to acquire additional assets accordingly.
A scoping study completed last year indicated that the project, located in an area of steep terrain, glaciation and climatic conditions that are fequently hostile, would require significant investment to progress it to the next stage. As such Platina has since been seeking a financial and technical partner for Skaergaard.
Platina Managing Director Corey Nolan said Eastern Zinc has both the capital pool and technical capacity requried to advance Skaergaard.
“The challenge for a company our size is that Skaergaard requires a significant capital investment to keep the licences in good standing and advance the project through the drilling and feasibility stages. Eastern has the cash resources and an exploration and geological team based in the northern hemisphere that will be dedicated to developing the project.”
“This deal will allow Platina shareholders to share in the project’s prospective value increase while providing Platina with an injection of new funding to pursue other opportunities. Platina has canvassed some of its major shareholders, who believe that this strategy of disposing of a non-core asset is appropriate at this time” he added.
The sale is still dependent on satisfactory completion of due diligence and securing regulatory approvals in both Australia and Greenland.
Platina Resources shares closed flat today at 2.5 cents per share.
