Cradle buys into African niobium project
PERTH (miningweekly.com) – ASX-listed junior Cradle Resources is set to acquire a 50% interest in the Panda Hill niobium project, in Tanzania, in a share deal with the vendor.
Under the terms of the share purchase agreement, Cradle Resource would acquire all of the share capital in Panda Hill Pty Ltd in exchange for 50-million performance shares and 50-million ordinary shares.
The Panda Hill company holds a 49% shareholding in RECB, which it acquired for some $3.34-million. RECB is a special purpose vehicle that fully owns the Panda Hill project, which was estimated to contain a Joint Ore Reserves Committee-complaint resource of 56-million tons, at 0.5% niobium.
The Panda Hill company also had the option to acquire a further 1% shareholding in RECB, at a fee of $30 000, and which would be exercisable for an additional $30 000.
Panda Hill further held the right to acquire the remaining interest in RECB under an earn-in/option agreement, which would see Panda Hill sole-fund project expenditure for up to four years.
The balance of 50% of the project could be acquired at any time during this four-year period for $17.1-million less 25% of project expenditure funded by Panda Hill.
Panda Hill could further elect to pay $5-million of the net purchase price in a noncash consideration, being either listed shares or a capped royalty, with the balance payable in cash.
Cradle reported on Wednesday that it had loaned Panda Hill $3.37-million to fund the completion of the 49% acquisition and the 1% option. If the acquisition of Panda Hill by Cradle was not completed, the sum would be repaid.
Following the acquisition, Cradle would hold 50% ownership of the Panda Hill project, as well as a four-year option to acquire the balance of the project for around $14-million, of which $9-million was payable in cash and $5-million in shares or capped royalty.
Cradle would also hold management of the project.
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