Carnavale Resources Ltd (ASX:CAV) is set to focus on its core gold assets after entering an option agreement for the sale of 80% of its Grey Dam Nickel-Cobalt Project to Trans Pacific Energy Group Pty Ltd (TPEG).
The divestment of Grey Dam includes licences M28/387 and E28/1477, close to Kurnalpi in Western Australia, and is part of CAV’s strategy of crystallising value from non-core exploration assets.
This sale gives CAV the focus it needs to push forward with gold exploration and development at its Kookynie Gold Project and Ora Banda South Gold Project.
Just a month ago, Carnavale Resources initiated an additional phase of resource drilling at the McTavish East prospect within the Kookynie Gold Project. This step is part of the company's strategy to establish an initial, shallow mineral resource estimate compliant with the JORC 2012 guidelines, anticipated for early next year.
Looking ahead to the first quarter of 2024, Carnavale plans to not only continue its exploration activities in areas A and B but also expand its drilling efforts to areas C and D. This expanded drilling campaign aims to investigate the potential for high-grade mineralisation along the strike in these new areas.
Carnavale entered into the agreement with TPEG through its wholly owned subsidiary Tojo Minerals Pty Limited. TPEG has an exclusive option to acquire 80% of Tojo’s interests in the Grey Dam Project.
“We are excited to enter this partnership with TPEG, who has an experienced corporate team that is looking to build nickel cobalt capabilities in Western Australia," Carnavale CEO Humphrey Hale said.
"The transaction will allow CAV to continue our aggressive focus on the Kookynie and Ora Banda gold projects in Western Australia, whilst allowing us to share in the upside with TPEG on one of our non-core assets.”
Material terms and conditions
1. TPEG will pay $100,000 for a two-year option period as follows:
- $50,000 within five days of signing the agreement; and
- a further $50,000 within five days of the parent entity of TPEG, New Generation Minerals Group Ltd (NewGen), listing on the Australian Stock Exchange (ASX).
2. During the option term and in the event of exercise of the option, then until completion of a bankable feasibility study, TPEG shall be solely responsible for maintaining Grey Dam
3. Nickel-cobalt project in good standing per all applicable laws including meeting the minimum statutory expenditure requirements.
4. Exercise of the option is conditional on the completion of legal and technical due diligence on the Grey Dam Nickel-Cobalt Project to the satisfaction of TPEG and obtaining all other necessary third-party consents and approvals (including concerning the existing royalties related to M28/387).
5. TPEG can exercise the option with a payment of $350,000 in cash and issuing $500,000 in NewGen shares at a deemed issue price of the 20-trading day volume weighted average price of NewGen shares immediately before the exercise of the option.
6. Carnavale is to be free carried to the completion of a bankable feasibility study.
7. TPEG will assume responsibility for its share of an existing 2% gross royalty payable comprising a 1% gross revenue payable on all nickel, copper, cobalt value if any profit from them is derived and a 1% total gold production royalty to third parties.