Sunstone Metals has signed a binding agreement to sell its Viscaria copper project located in northern Sweden to Copperstone Resources for a total consideration of A$47.3m ($33.8m).
The transaction will be executed through the sale of Sunstone’s wholly-owned subsidiary Avalon Minerals Viscaria, which holds a 100% stake in the Viscaria project.
The agreement comes after the parties signed a non-binding letter of intent (LOI) in August this year.
Sunstone Metals managing director Malcolm Norris said: “Sunstone is very pleased to be working with Copperstone and participating in building a significant Scandinavian base metal producer. We are excited about the future opportunities that will come from this transaction.”
Under the terms of the LOI, the transaction involves two stages. In the first stage, Copperstone will pay A$6.2m ($4.43m) in cash and issue 160 million Copperstone B-shares worth A$29.5m ($21.08m) on completion of the deal.
Subject to the receipt of the environmental permit for the project, the company will make an additional A$3.1m ($2.21m) and issue further 46 million B-shares worth A$8.5m ($6.07m).
Copperstone Resources chairman Michael Mattsson said: “Viscaria constitutes a high quality, copper price sensitive asset with low cap ex and an exploration upside in a first class mining district.
“Bringing this project towards a mine reopening will be an exciting and realistic journey for Copperstone together with our new main owner, Sunstone.”
Once the transaction is closed, Sunstone will hold a 30% shareholding in Copperstone, becoming the company’s largest shareholder.
This will allow the company to continue to have exposure to the upside at Viscaria as well as to Copperstone’s current exploration projects in Sweden.
Copperstone is focused on base and precious metal exploration near the Skellefte-field in northern Sweden.
The transaction is expected to be completed in December this year.