Greatland retains upside exposure through milestone payments and uncapped royalty
Greatland Gold plc (AIM: GGP) announce that the divestment of its Firetower and Warrentinna tenements (the Tasmanian Tenements) will formally complete on or around 9 June 2023 following the Flynn Gold’s Option exercise (as defined below).
On 30 November 2022, Greatland announced that it had entered into an agreement with Flynn Gold Ltd (ASX: FG1) under which Flynn Gold had the option (the Option) to purchase the Company’s Tasmanian Tenements (see RNS Announcement titled “Greatland enters an option agreement to sell its Tasmanian exploration licences while retaining a future economic interest in the projects” dated 30 November 2022).
Greatland was paid A$100,000 by Flynn Gold (satisfied by the issue of Flynn Gold shares) in respect of the Option which was exercisable no later than 30 June 2023. Flynn Gold has now exercised the Option to purchase the Tasmanian Tenements.
The consideration for the purchase consists of:
(a) Initial Consideration: A$200,000 to be satisfied by the issue of two million (2,000,000) Flynn Gold shares at a deemed issue price of A$0.10 per Flynn Gold share; and
(b) Deferred Consideration:
(i) A$500,000 upon the definition of a JORC-compliant Mineral Resource of at least 500,000 ounces of gold in aggregate within one or both of the Tasmanian Tenements (payable in cash or Flynn Gold shares, at Flynn Gold’s election);
(ii) A$500,000 upon the issue of a permit to mine by Mineral Resources Tasmania in respect of any part of the Tasmanian Tenements (payable in cash or Flynn Gold shares, at Flynn Gold’s election); and
(iii) a 1% Net Smelter Royalty payable to Greatland in respect of any production from the Tasmanian Tenements.
Greatland Managing Director, Shaun Day, commented:
“We are pleased that Flynn Gold has exercised its Option to purchase the Firetower and Warrentinna tenements. Flynn Gold is a local Tasmanian operator and is seeking to accelerate the advancement of these exploration projects.
This transaction provides for Greatland to realise immediate value from these tenements which are outside of our core focus locations while maintaining ongoing exposure to the upside potential of this prospective ground. This is a particularly pleasing outcome at a time that Greatland is accelerating its exploration efforts within the Paterson Province.“
