Why Did Resolution Minerals and Snow Lake Walk Away from Horse Heaven Deal?
Resolution Minerals and Snow Lake Resources have mutually agreed to halt their proposed transaction over the Horse Heaven Project, citing commercial disagreements despite no material due diligence issues.
- Mutual decision to not proceed with the transaction
- No material issues found during due diligence
- Offer was predominantly scrip-based and not tax effective
- Resolution Minerals continues to explore strategic options
- Company progressing with NASDAQ listing after OTCQB debut
Transaction Talks Collapse Despite Clean Due Diligence
Resolution Minerals Ltd (ASX – RML) and Snow Lake Resources Ltd (NASDAQ – LITM) have jointly decided not to move forward with the previously proposed transaction concerning the Horse Heaven Project. This announcement follows a period of due diligence, which revealed no significant issues, yet the parties could not agree on commercial terms satisfactory to both sides.
Key Deal Terms Prove Unattractive
Snow Lake’s indicative offer valued at A$225 million was structured at the asset level rather than the company level, resulting in tax inefficiencies for Resolution Minerals and its shareholders. Additionally, the offer’s heavy reliance on scrip-based consideration, coupled with pricing and escrow conditions deemed unattractive by Resolution Minerals, ultimately led to the breakdown in negotiations. The company expressed a preference for a larger cash component in any future offer.
Strategic Path Forward and Market Positioning
With the exclusivity period now expired and no binding agreements signed, Resolution Minerals remains committed to exploring alternative strategic options for the Horse Heaven Project. The company also highlighted its ongoing efforts to secure a NASDAQ listing, following its successful debut on the OTCQB market just days earlier. This move aims to broaden investor access and enhance capital market visibility.
Industry Implications and Investor Considerations
The termination of this transaction underscores the challenges junior mining companies face in balancing attractive deal structures with shareholder value preservation. While the clean due diligence results are reassuring, the inability to finalize terms may delay development timelines for the Horse Heaven Project. Investors will be watching closely for any revised offers or new strategic partnerships that could unlock value.
Bottom Line?
Resolution Minerals’ next moves on Horse Heaven and NASDAQ listing will be pivotal for its growth trajectory.
Questions in the middle?
- Will Snow Lake revise its offer to include more cash and better tax terms?
- What alternative strategic options is Resolution Minerals considering for Horse Heaven?
- When can investors expect updates on the NASDAQ listing progress?
