Greenvale Energy has agreed to a conditional term sheet with Astute Metals for the sale of its 20% shareholding in Knox Resources.
This transaction is pivotal for the ownership of the Georgina Basin Project in Australia’s Northern Territory, which is wholly owned by Knox Resources.
Under the terms of the agreement, Astute Metals will issue five million of its fully-paid shares to Greenvale Energy, valued at A$250,000 ($164,970), based on a price of A$0.05 per share upon completion.
Additionally, Greenvale could receive another five million shares if certain milestones are met within four years, post-acquisition.
These milestones include a significant discovery, a complete sale of Knox or the Georgina Project, or a mineral resource estimate prepared according to JORC Code guidelines.
The definition of discovery under the agreement includes a drill-hole intersection of 100m at 1% copper or equivalent, with a minimum grade of 1% copper.
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Alternatively, a Discovery can be an intersection of 100m at 1.3 grams per tonne (g/t) of gold or equivalent, with a minimum grade of 1.3g/t gold.
The agreement also stipulates the execution of a deed of variation of the option agreement, which was initially dated 28 November 2022, to confirm the terms and conditions of the transaction.
Completion of the sale is contingent upon obtaining shareholder and regulatory approvals.
Upon successful completion of the sale, Greenvale Energy’s stake in Astute Metals will increase from 11.21% to 12.27%.
The deal enables Greenvale to focus its financial resources on its energy projects and mitigates the risk of dilution in Knox should it decide not to contribute further.
The transaction also benefits Greenvale’s substantial shareholding in Astute by consolidating ownership of Knox.
Moreover, Greenvale’s interest in the project will transition from unlisted to listed status, and the company will retain a 2% net smelter royalty in the Georgina Basin, which could further enhance the asset’s value if Astute successfully develops the project.