Azure Minerals has agreed to divest its subsidiary companies that hold precious and base metals projects in Mexico to mineral resources developer Bendito Resources in a cash-stock deal worth A$20m ($14.3m).

As per the agreed terms, Azure will immediately receive A$6m in cash and a 10% equity stake in Bendito worth A$2m.

In the second tranche, the firm will secure A$4m in cash and A$8m in Bendito shares within 18 months from the deal closing.

Azure is expected to hold a maximum of around 15% of the issued shares capital of Bendito, upon completion of the latter’s listing on the Toronto Stock Exchange (TSX) that is expected within 18 months of deal completion.

With the transaction, Azure will retain exposure to the upside of assets in Mexico through shares in Bendito Resources.

It is also expected to help Azure focus on developing its 70km² Andover nickel-copper-cobalt project located 35km south-east of Karratha and immediately south of Roebourne, Western Australia.

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By GlobalData

Upon closing of the deal, Bendito’s core assets would be the Alacrán silver-gold-copper, the Oposura zinc-lead-silver project and the Promontorio project copper-gold-silver project.

These projects are located within the Laramide Copper Province, which is said to be the most prolific copper-producing district in North America.

Azure managing director Tony Rovira said: “We still see potential in these high-quality, advanced-stage projects and it makes sense for them to sit within a dedicated special-purpose group focused solely on Mexico, which can take them through development funded by the North American capital markets.

“With these extra funds, we will accelerate activities on our Andover Ni-Cu Project in WA which is proving to be a company-maker for Azure as we progress along the dual pathways of growing the mineral resources and advancing the development studies.”

Prior to its TSX listing, Bendito plans to undertake intensive drilling work at the Alacrán and Oposura projects.