Ora Banda Mining Ltd (ASX:OBM) is set to receive a $10 million payment from Davyston Exploration Pty Ltd (DEPL), a wholly-owned company of in the Wesfarmers (ASX:WES) Chemicals, Energy and Fertilisers division (WESCEF) after completing the first stage of a farm-in agreement for the non-gold mineral rights at the Davyhurst Project.
OBM signed an amendment to the transaction documents with DEPL that allowed – among other things – for a completion of the first tranche of the joint venture (JV) agreement, expected to occur today.
The company expects to receive the $10 million in cash concurrently with the formation of a JV with DEPL for tenements agreed upon under the transaction documents.
Total cash of $26 million
The inclusion of the remaining tenements to the JV are subject to conditions precedent being satisfied or waived by April 30, 2023, or another agreed upon date.
At that time OBM will receive the remaining upfront cash consideration of $12.1 million, and a further $3.9 million deferred cash payment upon, whichever comes first – April 30, 2024, or the execution of the last formal mineral sharing, JV and royalty agreements.
That would account for a total cash consideration of $26 million for the non-gold mineral rights over agreed-upon Davyhurst Project tenements.