Nov 19 2012
IMX Resources Limited is pleased to announce that it has entered into a non-binding heads of agreement with OZ Minerals Limited ('OZL') outlining the terms for the proposed sale of its 49% interest in the Mt Woods Copper-Gold Joint Venture to OZ Exploration Limited Pty Ltd ('OZ Exploration'), a wholly owned subsidiary of OZL.
IMX and OZ Exploration are parties to the Mt Woods Copper-Gold Joint Venture whereby OZ Exploration have committed to spend $20 million over 5 years to retain a 51% interest in the non-iron rights on IMX's Mt Woods tenements in South Australia. As at 30 September 2012, OZ Exploration has spent approximately $14 million of the $20 million.
Under the commercial terms set out in the Heads of Agreement ('HoA'), and subject to execution of binding transaction documents and the various approvals and consents noted below, OZL agrees to pay IMX $5 million cash. In addition, upon the required IMX shareholder approvals being obtained and completion of the transaction, IMX and OZL have agreed to cancel the 33,909,000 IMX ordinary shares held by OZL. Nil cash consideration will be payable by IMX to OZL for that cancellation, however, IMX expects to issue 33,909,000 replacement shares in the coming days to new investors. The issue of new shares to off-set the share cancellation will mean that the total funds derived from the sale, share cancellation and capital raise will be approximately $8.7 million, with (assuming completion occurs and IMX shareholder approval is obtained) no overall increase in issued capital or dilution to existing shareholders. Until such time as shareholder approval is obtained and completion occurs there will, however, be an intervening period where the issued capital will increase above the 362 million shares currently on issue.
Managing Director Neil Meadows said, "This agreement provides an elegant and equitable solution to the dissolution of the Mt Woods Joint Venture with OZ Minerals and allows both parties to walk away winners. IMX receives a significant injection of cash and we smoothly manage the exit of a major shareholder from our register and introduce new investors through a placement, without any dilutionary impact on our existing shareholders."
A heads of agreement has been signed but is non-binding until IMX and OZL complete the transaction documentation, expected to be before the end of November 2012. Key terms of the heads of agreement not explained above include:
- OZL will pay a $3 million deposit to IMX on signing of binding transaction documents.
- While legal title to all the joint venture exploration licenses will transfer to OZL on completion, IMX shall retain (subject to any permits or consents agreed to by the Minister of Mines under the Mining Act and other regulatory authorities) certain rights. In particular, IMX will retain the right to be granted access to the tenements for the purposes of exploration for iron ore after prior notification and consultation with OZL on planned activities.
- The Cairn Hill mining license (ML6303) does not form part of the sale agreement, and as such IMX shall retain the non-iron ore rights over the Phase 1 Area of the Cairn Hill Mining Licence (ML6303) whilst the Cairn Hill joint venture retains the iron ore rights; and
- A number of relevant consents are required for completion of the Transaction, including: approval of IMX shareholders, State and Commonwealth Government approvals as well as FIRB approval.
IMX will convene an Extraordinary General Meeting so that shareholders can vote on the transaction, and also vote on the selective cancellation of OZL's shares. A notice of meeting and explanatory memorandum will be sent to shareholders in the coming weeks.
Completion of the Proposed Transaction and issue of 33,909,000 shares is expected to deliver sufficient cash proceeds to enable the Company to continue its exploration and evaluation work on the 100% owned Nachingwea property in south eastern Tanzania, where the Company's Ntaka Hill Nickel Sulphide Project is located.