Andromeda Metals Ltd (ASX:ADN) has completed the sale of South Australian exploration licence EL5984, which contains the Moonta Copper-Gold Project, but retains exposure to any future cash flow generated from the EL.
The Sale and Purchase Agreement with EnviroCopper Ltd (ECL) and its wholly-owned subsidiary Environmental Metals Recovery Pty Ltd was completed yesterday and Andromeda has received $50,000 in cash as well as 203,008 fully paid ordinary shares in ECL.
Grant of royalties
This agreement also includes the grant of a royalty, equal to 10% of the operating cashflow derived from the Alford Project Area, up to $15 million.
There is also a royalty equal to 10% of the operating cashflow derived from in respect of the Moonta Project Area, up to $15 million.
EL5984 covers an area on South Australia’s Yorke Peninsula.
READ: Andromeda Metals to sell Alford West tenement to EnviroCopper and retain royalties from operations
Post completion, Andromeda will also be entitled to either $100,000 in cash or 101,504 fully paid ordinary shares in ECL following successful completion of a Site Environmental Lixiviant Test (SELT) within the project area being undertaken, at the sole discretion of the company.
Also, following the granting of a Mining Lease within the project area to ECL, its related body corporate, nominee or assignee, Andromeda will be entitled to a further $150,000 in cash.
Facilitated by Thor Energy
This deal, facilitated by Thor Energy PLC (AIM:THR, OTCQB:THORF, ASX:THR), which currently holds a 30% equity interest in ECL, has been struck to expand that company's portfolio.
Andromeda CEO and managing director Bob Katsiouleris previously said: “The sale of these assets continues our consistent approach to implementing our corporate strategy, through divesting non-core assets to support the commercialisation and development of The Great White Project.”