NAE’s Lochinvar Exit Shifts Focus to Gold and Lithium Amid Royalty Reliance Risks
New Age Exploration has finalized the sale of its Lochinvar Metallurgical Coal Project, entering a royalty agreement that could yield up to A$15 million, while sharpening its focus on gold and lithium assets in Australia and New Zealand.
- Sale of 100% interest in Lochinvar Coal Project to Paladar Trading Ltd completed
- Royalty deed grants NAE A$1 per tonne on first 15 million tonnes extracted
- Potential royalty income up to A$15 million contingent on project development
- Strategic refocus on core gold and lithium exploration in Central Pilbara and New Zealand
- Transaction frees resources to advance higher-growth asset portfolio
Strategic Asset Realignment
New Age Exploration Ltd (ASX, NAE) has officially completed the sale of its Lochinvar Metallurgical Coal Project in the UK, marking a significant pivot in the company’s asset strategy. The transaction, executed with Paladar Trading Ltd, transfers full ownership of Lochinvar Coal Limited, the subsidiary holding the coal project, to Paladar. This move allows New Age Exploration to concentrate its efforts and capital on its more promising gold and lithium projects located in the Central Pilbara region of Western Australia and in New Zealand.
Royalty Agreement Secures Future Earnings
Alongside the sale, New Age Exploration has entered into a definitive royalty deed with Paladar. Under this agreement, NAE will receive a royalty payment of A$1.00 per tonne on the first 15 million tonnes of minerals, ores, or concentrates extracted and sold from the Lochinvar licences. This arrangement positions NAE to potentially earn up to A$15 million in royalties, contingent on Paladar’s successful development and production at the project. While this royalty stream provides a valuable future income opportunity, it remains dependent on factors outside NAE’s direct control.
Refocusing on Core Growth Areas
Executive Director Joshua Wellisch emphasized the strategic nature of the transaction, highlighting that the sale and royalty deal enable the company to sharpen its focus on assets with higher growth potential. The Central Pilbara gold and lithium projects, along with exploration initiatives in New Zealand, represent the core of NAE’s future value creation strategy. By divesting a non-core coal asset, NAE can allocate more resources and management attention to advancing these promising opportunities.
Market and Investor Implications
The completion of this deal signals to the market that New Age Exploration is streamlining its portfolio to concentrate on commodities currently in strong demand, such as lithium and gold. Investors may view the royalty agreement as a prudent way to retain exposure to the Lochinvar project’s upside without the operational risks of ownership. However, the ultimate financial benefit from royalties will hinge on Paladar’s ability to bring the coal project into production.
Looking Ahead
With the Lochinvar sale behind it, New Age Exploration’s next chapter will focus on delivering exploration results and development progress in its core regions. The company’s ability to convert these assets into producing mines will be critical to sustaining investor confidence and driving share price appreciation.
Bottom Line?
NAE’s Lochinvar exit and royalty deal clear the path for a sharper focus on gold and lithium growth, but royalty returns depend on Paladar’s success.
Questions in the middle?
- How quickly will Paladar advance development and production at the Lochinvar project?
- What exploration milestones can NAE achieve in Central Pilbara and New Zealand in the near term?
- Could NAE pursue further portfolio optimization or capital raising to accelerate core asset development?
