Mammoth Minerals has agreed to sell a 90% stake in its Paterson copper-gold project to Cloudbreak Discovery for AUD 3.1 million in shares, refocusing its efforts on high-grade US assets while retaining a strategic interest in Paterson.
- Sale of 90% interest in Paterson Project to Cloudbreak Discovery PLC
- Consideration of AUD 3.1 million via issuance of 300 million Cloudbreak shares
- Mammoth retains 10% free-carried interest until positive feasibility study completion
- Mammoth becomes 17% shareholder in Cloudbreak post-transaction
- Strategic shift towards high-grade gold and copper projects in the USA
Strategic Portfolio Shift
Mammoth Minerals Limited (ASX, M79) has announced a significant divestment of its Paterson copper-gold project in Western Australia, marking a clear pivot towards its growing portfolio of high-grade gold and copper assets in the Americas. The company has entered into an exclusive option agreement to sell a 90% interest in the Paterson Project to London-listed Cloudbreak Discovery PLC (LSE, CDL) for approximately AUD 3.1 million, paid in Cloudbreak shares.
This transaction aligns with Mammoth’s stated strategy to concentrate on its recently acquired Excelsior and Bella Gold Projects in the United States, both of which offer promising exploration upside in prolific mining regions.
Deal Structure and Financial Implications
Under the terms, Cloudbreak Discovery will pay a $20,000 cash option fee for a two-month exclusive period to evaluate the Paterson Project. Should Cloudbreak exercise the option, it will issue 330 million shares to Mammoth, netting Mammoth 300 million shares after 30 million are allocated to unrelated parties facilitating the deal. This share issuance values the project at roughly £0.005 per share, translating to AUD 3.1 million.
Mammoth will retain a 10% free-carried interest in the Paterson Project until the completion of a Definitive Feasibility Study (DFS) that demonstrates a positive net present value (NPV). Additionally, Mammoth will become a 17% shareholder in Cloudbreak, maintaining a strategic stake in the project’s future exploration and development.
Paterson Project Highlights
The Paterson Project covers an extensive 888 square kilometers in the East Pilbara region, near major deposits such as Greatland Resources’ Telfer Gold-Copper Mine. The project boasts multiple significant copper and molybdenum intercepts, including high-grade zones like 17 meters at 1.6% copper and 317 ppm molybdenum, underscoring its exploration potential.
Mammoth’s Executive Chairman, Rob Jewson, emphasized the project’s compelling attributes and the rationale behind the divestment, focusing on core high-grade assets in the Americas while partnering with a capable explorer to unlock value in Paterson.
Looking Ahead
With multiple work streams advancing across Mammoth’s US projects, the company is streamlining its portfolio to concentrate capital and management attention where it sees the greatest potential for shareholder value creation. The partnership with Cloudbreak offers a pathway to continue exploration at Paterson without diluting Mammoth’s focus on its American assets.
Investors will be watching closely as Cloudbreak assesses the project during the option period and as Mammoth progresses its US exploration programs, which include the Excelsior Gold Project in Nevada and the Bella Gold Project in South Dakota.
Bottom Line?
Mammoth’s divestment of Paterson signals a sharper focus on its US assets, but the next moves by Cloudbreak will be critical to unlocking Paterson’s value.
Questions in the middle?
- Will Cloudbreak exercise its option and proceed with the Paterson acquisition?
- How will Mammoth’s retained 10% free-carried interest impact future financial returns?
- What exploration milestones can investors expect from Mammoth’s US projects in the near term?