Why Did OZZ Resources Grant Scorpion Minerals a $2.6M Option on Key Tenements?

Exclusive Option Agreement Marks Strategic Shift

OZZ Resources Limited has formalised a significant step in its corporate strategy by granting Scorpion Minerals Limited an exclusive option to acquire its entire portfolio of tenements and associated mining information. This binding agreement, announced on December 23, 2025, sets the stage for a potential $2.6 million transaction, including an upfront option fee and subsequent consideration upon exercise.

The option agreement provides Scorpion Minerals with a one-year window, expiring December 22, 2026, to complete due diligence, secure a mining lease, and obtain all necessary regulatory and shareholder approvals. Notably, the deal includes a provision for extension if the mining lease is not granted within the initial period, reflecting the complexities of mining tenure in Western Australia.

Financial Terms and Shareholder Implications

Under the terms, Scorpion Minerals will pay an initial non-refundable option fee of $100,000, followed by a $2.5 million consideration payable either in cash or fully paid shares, subject to shareholder approval. This structure offers flexibility for both parties, balancing immediate value with potential equity participation.

OZZ’s board has expressed confidence that this arrangement delivers an attractive post-tax value to shareholders, especially given the absence of superior alternatives for the assets. However, the transaction is classified as a disposal of the company’s main undertaking, necessitating shareholder approval under ASX Listing Rule 11.2. OZZ plans to convene a general meeting to secure this consent, providing shareholders with comprehensive details to inform their vote.

Regulatory Hurdles and ASX Suspension Status

The agreement comes amid ongoing regulatory scrutiny, with OZZ’s securities currently suspended on the ASX since June 2025. The suspension will remain until the ASX is satisfied that OZZ complies with listing rules, including continuous disclosure obligations. The company has withdrawn from a previously proposed transaction and is focusing on operational cost containment while exploring new opportunities.

Completion of the acquisition is contingent on multiple conditions precedent, including successful due diligence, mining lease grant, and receipt of all necessary approvals. These hurdles underscore the inherent uncertainties in mining asset transactions but also highlight the methodical approach both parties are taking.

Future Revenue Stream via Gold Royalty

Beyond the upfront and deferred payments, OZZ will benefit from a 1% royalty on gold produced and sold from the tenements post-acquisition. This ongoing revenue stream aligns OZZ’s interests with the future success of the project under Scorpion Minerals’ stewardship, providing a potential upside beyond the initial transaction value.

As the mining sector watches closely, this agreement represents a pivotal moment for OZZ Resources, potentially reshaping its asset base and financial outlook while offering Scorpion Minerals a foothold in promising Western Australian tenements.