Latitude 66 Unlocks $2M from Greater Duchess JV Sale, Eyes Further Gains

• Sale of 17.5% interest in Greater Duchess JV for $2 million upfront
• Potential contingent payments up to $4 million or more based on JV ownership changes
• Carnaby Resources holds 30-day right of first refusal on the sale
• Unsecured $750,000 loan secured from Argonaut Partners to fund operations
• Transaction aligns with Latitude 66’s strategy to focus on core assets

Strategic Asset Sale to Unlock Value

Latitude 66 Limited (ASX, LAT) has taken a decisive step to streamline its portfolio by entering into a non-binding term sheet to sell its entire 17.5% interest in the Greater Duchess Copper Gold Joint Venture. The upfront consideration for this non-core asset is A$2 million, with the possibility of further contingent payments that could significantly enhance the total proceeds.

The Greater Duchess Joint Venture, located about 70 kilometres southeast of Mount Isa in Queensland, is a partnership with Carnaby Resources Limited (ASX, CNB). Latitude’s Managing Director, Grant Coyle, emphasised that the sale aligns with the company’s broader strategy to unlock value from Australian assets while focusing resources on advancing projects in Finland and Western Australia.

Contingent Payments and Right of First Refusal

The deal structure includes a potential additional payment of A$4 million, or an equivalent value in ASX-listed shares, if a party acquires 100% ownership of the joint venture within 90 days of the announcement. Alternatively, if the purchaser divests the interest within that period without a full acquisition, Latitude 66 stands to receive 50% of any proceeds exceeding A$4 million from such a divestment.

Importantly, Carnaby Resources has been formally notified of its right of first refusal, which it must exercise within 30 days. Should Carnaby choose to acquire the interest, the purchasers will receive unlisted options in Latitude 66, adding another layer of complexity and potential value to the transaction.

Supporting Growth with Non-Dilutive Funding

Alongside the sale agreement, Latitude 66 has secured an unsecured loan of A$750,000 from Argonaut Partners Pty Ltd. This infusion of near-term, non-dilutive capital is designed to support the company’s ongoing exploration and development activities, particularly in its Finnish and Western Australian projects. The loan carries a 1% monthly interest rate, capitalised monthly, with repayment terms linked to the completion or termination of the sale transaction or within 12 months.

This financial arrangement underscores Latitude 66’s commitment to maintaining momentum on its core assets while prudently managing its balance sheet.

Looking Ahead

The Greater Duchess Copper Gold Project itself comprises multiple exploration permits with established mineral resource estimates, including notable deposits such as Lady Fanny, Nil Desperandum, Duchess, Burke & Wills, and Mt Birnie. Carnaby Resources’ recent scoping study highlights the project’s potential, but Latitude 66’s decision to divest its stake signals a strategic pivot towards assets with higher priority or better alignment with its growth plans.

As the 30-day window for Carnaby’s right of first refusal closes, market participants will be watching closely to see whether the sale proceeds to Argonaut Partners and Neon Space or if Carnaby steps in. The outcome will influence Latitude 66’s near-term funding profile and its ability to accelerate development in other jurisdictions.

Bottom Line?

Latitude 66’s sale of its Greater Duchess JV interest marks a pivotal moment, balancing immediate cash flow with potential upside, while setting the stage for renewed focus on core projects.

Questions in the middle?

• Will Carnaby Resources exercise its right of first refusal or allow the sale to proceed?
• How will Latitude 66 deploy the $750,000 loan to advance its Finnish and Western Australian projects?
• What impact will contingent payments have on Latitude 66’s valuation if full JV ownership changes occur?