Why Strategic Energy Resources Sold South Cobar for $400K Plus Royalties

Strategic Sale to Fund Exploration Ambitions

Strategic Energy Resources Limited (ASX – SER) has taken a decisive step to streamline its portfolio by selling the South Cobar Project to Australian Gold & Copper Limited (ASX – AGC). The deal, announced on 10 June 2025, brings in $400,000 in cash payments, split between an upfront $50,000 and $350,000 upon completion, alongside a production-based royalty capped at $1 million.

This move allows SER to unlock immediate capital while maintaining a stake in the project’s future success through a $100 per gold equivalent ounce production payment. The South Cobar Project, known for its polymetallic mineralisation potential, will now be under the stewardship of AGC, a company that has already demonstrated significant discoveries in the region.

Strategic Alignment and Risk Sharing

Dr David DeTata, Managing Director of SER, highlighted that the transaction fits neatly within the company’s broader corporate strategy. By generating high-quality greenfields projects and leveraging science-driven exploration, SER aims to add value while sharing risks and rewards with credible partners. Selling South Cobar to AGC, a proven explorer in the area, ensures systematic and focused exploration continues without SER bearing the full operational burden.

The deal’s structure reflects a balanced approach – immediate liquidity supports ongoing exploration efforts across SER’s portfolio, while the capped production payment offers upside potential if AGC’s exploration yields commercial production. This hybrid model of cash plus royalties is increasingly common in the mining sector as companies seek to optimize capital allocation and risk exposure.

Looking Ahead – What This Means for SER and AGC

For Strategic Energy Resources, the sale marks a pivot towards concentrating resources on other promising projects, potentially accelerating discovery timelines elsewhere. Meanwhile, Australian Gold & Copper gains a valuable asset with significant exploration upside in a mineral-rich region, complementing its existing portfolio.

Completion of the sale remains subject to standard conditions, but the transaction’s announcement signals confidence from both parties. Market watchers will be keen to see how AGC advances exploration and whether the production payment threshold is eventually reached, which would provide a meaningful revenue stream back to SER.