Exercise of option over iron ore projects in Western Australia
Alien Metals Limited, the AIM-quoted mineral exploration and development company, is pleased to report that following the completion of the technical due diligence report on the Hancock Ranges and Brockman Iron Ore Projects, the Board has notified Windfield Pty ltd of its intention to exercise its option to acquire a 51% interest in the projects. The parties are preparing formal documentation relating to the transaction, with settlement to take place in the coming weeks. The initial consideration shares and share purchase warrants, as referenced below, will be issued following the finalisation of legal documentation.
Technical Director of Alien Metals, Bill Brodie Good, commented that “based on a full review of the final due diligence report and geological assessment of the 17 rock chip samples taken in relation to the historical prospects as well as the fact that both project areas are very underexplored and would appear to have potential for further mineralisation, I am excited to make the decision to exercise the option with Windfield and to start planning for more detailed exploration work for the coming field season in the region”.
Due Diligence Report
The due diligence work carried out on these two projects, as previously reported on 12 November 2019, identified the potential of both the existing known prospects including the Sirius Extension and Kalgan prospects in the Hancock Ranges and the BHP 19 and 20 prospects in the Brockman project but, as importantly, indicated that due to a combination of geology seen during the brief site visit and the fact that both of these tenements are very underexplored, they both also hold potential for further high grade iron ore discoveries.
As previously reported on 20 September 2019, the consideration for acquiring the 51% interest in the aforementioned projects shall be as follows:
· 200,000,000 UFO shares issued at a Deemed Issue Price of 0.11p;
· 66,666,666 share purchase warrants, exercisable at an 80% premium to the Deemed Issue Price;
· £100,000 payable 12 months from Completion of the acquisition;
· 100,000,000 performance shares, to be issued at the Deemed Issue Price in two tranches upon achievement of the following performance hurdles:
o 10,000,000 tonne JORC inferred resource at greater than 54% Fe (Hurdle 1); and
o 20,000,0000 tonne JORC inferred resource at greater than 54% Fe (Hurdle 2).
Following the exercise of the option, Alien will be required to maintain the licenses in good standing and sole-fund the first two years of minimum commitments, estimated at A$45,000; thereafter, the parties will fund pro-rata to their respective interests.
The upfront Consideration Shares will be subject to a 6-month lock-in period.
Following finalisation of the legal documentation, Alien Metals plans to build on the data procured from the due diligence work as well as compiling in more detail all historic data available both from historical reports and any further open source data to develop a detailed database with the aim to help plan an exploration program on both tenements to advance both the existing prospects and explore the untested further potential.
The Company is very excited by these acquisitions and will be working towards unlocking further value in coming months.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.
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