Australia-based Venture Minerals has agreed to divest its Riley Iron Ore Mine in Tasmania to Goldvalley.

This move, advised by Argonaut PCF, aims to enhance the company’s cash reserves and focus on its new Jupiter rare earth discovery.

The sale agreement with Goldvalley involves a $3m (A$4.51m) payment to Venture Minerals and the transfer of all shares in Venture Iron.

This deal is expected to be completed on 8 July 2024, with no conditions precedent.

Venture Minerals, after a thorough review, has decided that the sale of the Riley Iron Ore Mine is the most beneficial option for its shareholders.

The company’s cash position will be strengthened by an immediate $3m payment and an additional $585,000 upon the return of a bank guarantee.

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Goldvalley will assume responsibility for the mine’s governmental approvals and replace the bank guarantee held by Mineral Resources Tasmania.

Terms of the sale are standard for such transactions, and Venture is confident in Goldvalley’s ability to fulfil the agreement.

Argonaut PCF, the advisors for the sale, will receive a success fee of $250,000 and the option to subscribe for 25 million shares at a premium.

Venture Minerals managing director Philippa Leggat said: “The refreshed board is focused on creating shareholder value. The sale of Riley sees Venture receiving three million dollars and our environmental bond of over half-a-million dollars being returned to the company.

“This capital injection will be used to advance our high-grade, clay-hosted rare earth project, Jupiter. This also frees our team to focus their efforts on advancing Jupiter while eliminating the financial burden of maintaining the Riley Project on care and maintenance.”