ASX-listed IMX Resources has entered into an agreement with Cu-River Mining Australia to sell its 100%-owned Mt Woods tenements in South Australia for cash proceeds of $3.68 million.
Cu-River Mining is a private company based in Perth, Western Australia. The sale of the Mt Woods tenements will enable the Company to extinguish the $3 million liability to Flinders Ports, allowing it to entirely focus on exploring its highly prospective Nachingwea Property in Tanzania, in particular the Chilalo graphite and Kishugu gold prospects, where drilling is planned to commence in October 2014.
IMX Chairman, Derek Fisher said the sale of the Mt Woods tenements complete s its withdrawal from iron ore in South Australia. Its sole focus is now the highly prospective Nachingwea Property in Tanzania, with its graphite, nickel and gold.
“While the Mt Woods tenements contain a substantial magnetite resource, potential shareholder returns from their development would require significant funding and take considerable time to explore and develop,” Fisher said in a statement.
“The disposal of these tenements means the Flinders Ports liability can be extinguished without shareholder dilution at the corporate level and considering the current iron ore price environment is an excellent outcome. This simplifies the IMX investment proposition with our effort now solely directed to exploration at the Nachingwea Property.”
When completed, the sale of the Mt Woods tenements, which is subject only to the regulatory conditions outlined below, will allow IMX to fully discharge its liability under the guarantee provided to Flinders Ports as part of the port logistics contract for the previously operated Cairn Hill mine.
Under the agreement, Cu-River Mining has paid a $500,000 deposit to IMX, with the balance of the consideration payable once the conditions precedent have been satisfied, which include approval by the South Australian Government; approval by the Federal Treasurer under the Foreign Acquisitions and Takeovers Act 1975; and permission being granted under the Defence Act 1903, given that the tenements are located in the Woomera Prohibited Area.
If the conditions precedent have not been satisfied within 1 2 weeks of executing the agreement, IMX has the option to terminate the transaction. The sale of the Mt Woods tenements simplifies the Company’s asset portfolio, allowing for it be a focused explorer, operating in Tanzania with significantly reduced overheads.
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