MRC’s Skaland Sale Stalls with USD 9.62M Final Payment Pending
Mineral Commodities Ltd reveals ongoing delays in completing the sale of its Skaland Graphite Project due to funding issues faced by the buyer, Norge Mineraler. Despite partial payments and new guarantees, the final USD 9.62 million payment remains outstanding.
- Sale of Skaland Graphite Project delayed due to buyer funding issues
- Norge Mineraler made partial non-refundable payments totaling USD 1 million
- Interest of 12.5% p.a. applies on overdue payments
- Additional working capital and cost reimbursements agreed
- Parent company guarantee to secure buyer’s obligations
Background to the Sale
Mineral Commodities Ltd (ASX: MRC) has been progressing the sale of its wholly owned subsidiary Skaland Graphite AS, a key asset in Norway, to Norge Mineraler Holding AS. The transaction, initially expected to complete by 21 March 2025 following satisfaction of all conditions, has encountered significant delays due to unforeseen funding difficulties on the buyer’s side.
Partial Payments and New Terms
In April, Norge Mineraler made a partial non-refundable payment of USD 500,000 and converted a previously refundable deposit of USD 1 million into a non-refundable sum. The buyer has also agreed to pay interest at a steep 12.5% per annum on overdue amounts, reflecting the seriousness of the delay. More recently, Norge Mineraler committed to an additional USD 500,000 non-refundable payment and NOK 5 million in working capital directly to Skaland to maintain operations.
Securing Completion with Guarantees
To bolster confidence in the transaction’s eventual completion, Norge Mineraler has agreed to provide a parent company guarantee from its UK-based parent, Norge Mining Limited. This guarantee is designed to ensure that Norge Mineraler meets all its obligations under the share purchase agreement, including the outstanding payment of approximately USD 9.62 million plus accrued interest.
Implications for Stakeholders
CEO Scott Lowe acknowledged the importance of finalising the payment for shareholders, contract parties, lenders, and employees. The company is maintaining close communication with Norge Mineraler to expedite the resolution. However, the delay introduces uncertainty around the timing and certainty of completion, which could impact Mineral Commodities’ financial planning and operational focus.
Looking Ahead
While Mineral Commodities has secured commitments for additional payments and guarantees, the market will be watching closely for confirmation of the final payment timeline. The company has promised further updates once funding arrangements are finalised, but until then, the sale remains in a state of cautious limbo.
Bottom Line?
The Skaland sale saga underscores the risks of funding delays in major asset transactions and keeps investors on alert for the next critical update.
Questions in the middle?
- When exactly will Norge Mineraler complete the final payment and close the transaction?
- What are the risks if Norge Mineraler fails to secure the promised funding or parent guarantee?
- How will the delay affect Mineral Commodities’ financial position and strategic plans?
