According to a recent report, Metallica Minerals Limited has entered into a sale agreement with Clear Logistics Australia Pty Ltd, a private company with experience in bauxite, heavy mineral sand and industrial sand, and gravel operations. The latter will purchase Metallica’s subsidiary company Oresome Australia Pty Ltd, a 50% joint venture partner in the Urquhart Bauxite Project near Weipa in Far North Queensland.
Some of the key terms of the sale agreement include: 1) First instalment of $50,000 should be payed now, while a further $50,000 should be payed within 30 days of the signing of the Share Sale Agreement. 2) A milestone payment of $100,000 should be done upon the shipment of the first 1 million dry tonnes of bauxite and an additional $100,000 upon the shipment of the second 1 million dry tonnes from the tenement.
In return to the sale, Metallica Minerals will get a royalty payment of $0.75 per tonne shipped if the benchmark CBIX Bauxite Index price is less than US$ 60 per tonne. The royalty payment will increase to $1.50 per tonne or $2 per tonne shipped if the CBIX Bauxite Index price is between US$$60.01 and US$$70/tonne or above US$70.01 per tonne.
Metallica executive chairman Theo Psaros said: “We sought interest from a number of parties, the offer from Clear Logistics was superior to other potential offers.”
He also said: “In addition to the tough bauxite market conditions, we are of the strong view that to continue using shareholder funds to maintain the 50% share during such uncertain bauxite market conditions is not in the company’s interest.”
“We are encouraged with the progress of our Cape Flattery Silica Sand Project and subject to finalisation of the Traditional Landowner agreements, we expect to be drilling in the near future,” he added.
If in the future, Clear Logistics transfers or disposes of the shares in Oresome, the profit on that sale will be shared 50% with Metallica.
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