Australian mining firm Shree Minerals (SHH) has agreed to divest its stake in the Arunta joint venture (JV) with Territory Lithium, to MetalsGrove Mining (MGM).

According to the sale and purchase agreement (SPA), Shree Minerals will sell its rights, title and interest in the farm-in, as well as the joint venture and shareholder agreement, to MetalsGrove.

In exchange, MGM will pay A$50,000 to SHH, as well as issue 4.75 million fully paid ordinary MGM shares, each at a price of A$0.20, to SHH.

The Arunta JV holds the Box Hole, Edwards Creek and Bruce Gold projects, all located in the Northern Territory in Australia.

The transaction is conditional on several conditions precedent, including a due diligence investigation by MetalsGrove and ASX approval.

This sale is part of Shree’s efforts to focus on its existing high-priority exploration targets in New South Wales and Western Australia.

Shree is also planning to restart production at its Nelson Bay River iron ore project in Tasmania.

Although the mine started production in November 2013, it was placed on care and maintenance in June 2014 due to a decline in iron ore prices by nearly 50%.

In October 2021, Shree Minerals said the Development Proposal & Environment Management Plan (DPEMP) for Direct Shipping Ore (DSO) at Nelson Bay River Iron Project was accepted by the Environmental Protection Agency.

In a press statement, SHH said: “At present, SHH does not intend to conduct an in-specie distribution of the MGM shares but notes that SHH shareholders will retain exposure to MGM while SHH holds the MGM Shares, which may be subject to ASX escrow upon the listing of MGM.”