Latin Resources Ltd (ASX:LRS, OTC:LRSRF) has agreed to divest its Lachlan Fold Belt Project to a new entity that plans to list on the ASX. The sale frees up Latin to focus on its other projects including its flagship Salinas lithium project in Brazil, while the deal is structured so that Latin maintains exposure to the Lachlan Fold Belt Project.
Latin has entered into a binding heads of agreement with Maverick Minerals Ltd for the sale of 100% of the issued capital in Latin's wholly owned subsidiary Lotus Minerals Ltd, the sole holder of the Lachlan Fold Belt Project.
Maverick was established with the view to listing on the ASX in the coming months. Its focus will be on projects in tier one exploration and mining jurisdictions, including the portfolio of NSW projects acquired from Lotus, plus Western Australia and Canada. Its commodity exposure will include lithium, copper and base metals and will target the growing battery minerals and critical minerals thematic.
Experienced director and mining engineer Sam Smith has been appointed to lead Maverick through the ASX listing process and take up the managing director role post listing. Smith has over 15 years’ experience in the resources sector working in executive level positions, most recently as CEO and executive director of Breaker Resources.
Smith said: “Maverick is in the fortunate position of having a great portfolio of projects to begin its journey, and having the support of Latin Resources as a major shareholder and with a vested interest at Board level too.”
The sale of Lotus frees up Latin to focus on its flagship Salinas lithium project in Brazil, along with its Cloud Nine Project, Catamarca Project and MT-03 Project.
The sale allows for Maverick to further explore the Lachlan Fold Belt Project. Given that consideration for the project will be paid in Maverick shares and options, with a priority offer to Latin shareholders in the IPO (as detailed further below), Latin shareholders can participate in the growth of Maverick
Latin will remain a major shareholder in the new entity and recognises the prospective nature of the Lachlan Fold Belt Project that warrants investigation by its own experienced board and management team.
Terms of the transaction
In consideration for the acquisition of Lotus and its Lachlan Fold Belt Project — comprising the Boree Creek Copper Project (EL9273); the Peep O’Day Gold Project (EL9412); the Manildra and Burdette Gold Projects (EL9172 and EL9148); the Gundagai Ni-Cu-Au-PGE Project (EL9274); the Boree Creek Copper Project (EL6638); and the Mt Unicorn North Project (ELA007373) — Maverick will issue:
- 6,000,000 Maverick shares to Latin at a $0.20 per share issue price;
- 5,000,000 options to acquire shares, exercisable at $0.30 within five years of their issue;
- a further 1,000,000 Maverick shares to Latin at $0.20 per share to extinguish an inter-company loan payable by Lotus to Latin;
- Maverick will raise $500,000 in seed funding via the issue of 5,000,000 shares at $0.10 per share;
- Maverick will raise $5,000,000 (before costs) via an issue of 25,000,000 shares at $0.20 per share pursuant to its IPO. The IPO is to contain a priority offer to Latin shareholders to subscribe for up to 50% of the total funds raised in the IPO. Latin will advise shareholders how they can participate;
- a loyalty option will be issued to Maverick shareholders three months after the IPO on a 2-for-5 basis, with 17,200,000 options issued on the same terms; and
- Latin will have the right to appoint up to two representatives to the Maverick board of directors.