Highlights
- A payment obligation to Mutual Holdings had triggered as SRN reported increase in mineral resource at Victory Bore tenement twice.
- After adjusting previous cash payment and offset credit, SRN owes a balance of AU$11.28 million.
- Mutual Holdings had agreed to take part of the payment through company’s equity, shareholder’s approval is yet to be sought.
Surefire Resources NL (ASX: SRN) has a payment obligation of AU$11.28 million to Mutual Holdings Pty Ltd under the pre-existing agreement, which was inked when the acquisition of Victory Bore was completed in April 2019.
The payment obligations were triggered as the company reported an increase in mineral resources at the Victory Bore tenement (E57/1036) twice, once in February 2023 and for the second time in December 2023, as part of a pre-feasibility study (PFS). Additionally, the company also announced a maiden mineral resource of aluminium oxide at the tenement.
Shareholder approval concerning the payments to Mutual Holdings under the agreement was received at the general meeting held in March 2019.
Payment details
The first announcement regarding the upgraded mineral resource triggered a payment of AU$3.75 million. On April 5, 2023, SRN informed that Mutual Holdings had agreed to take a portion of the payment in the form of the company’s equity. This agreement is subject to shareholder and regulatory approval. However, the company has not yet pursued approval for the equity issuances.
The second payment of AU$8.29 million was triggered by a significant increase in mineral resources as reported through PFS and the maiden aluminium resource announcement. Combining the two due payments, the amount payable to Mutual Holdings reached AU$12.04 million.
On May 29, 2023, the company received a cash payment of AU$450,000. The offset of AU$312,012.79 was credited pertaining to the full entitlement exercised by the Vladimir Nikolaenko Group in the non-renounceable rights issue undertaken by SRN in 2023.
After including these two payments, the company is yet to pay the balance of AU$11.28 million, as and when funds allow.
The company highlighted that MH has agreed that it would not demand payment if it places SRN in a situation of not being able to pay its debts when they fall due, for a period of minimum one year (from the date the deed of amendment is inked).
SRN shares traded at AU$0.010 apiece at the time of writing on 18 March 2024.