Albright Metals Turns Gabanintha Exit Into Golden Pike Funding

Albright Metals Limited (ASX:ABR) is turning a dormant mineral-rights position into $1.75 million of funding, exiting its 2017 Gabanintha agreement with Australian Vanadium Ltd (ASX:AVL) and redirecting capital towards its Golden Pike Gold and Antimony Project in Canada.

Gabanintha Rights Return to Australian Vanadium

Under the binding agreement, all of Albright Metals’ rights and interests under the Mineral Rights Sale Agreement will revert to AVL. Those rights covered minerals at the Gabanintha Project other than vanadium, uranium, cobalt, chromium, titanium, lithium, tantalum, manganese and iron ore, which had remained with AVL.

In exchange, AVL will pay $500,000 in cash and issue $1.25 million worth of its shares. The number of shares cannot yet be calculated because the issue price will be based on AVL’s 20-day volume-weighted average price ending on the trading day before issue. The shares will also be subject to an orderly sale process, leaving Albright with a liquid component and an equity exposure whose eventual size remains unsettled.

Royalty Adds Exposure to Tumblegum South

The consideration also includes the transfer to Albright of AVL’s 0.75% net smelter return royalty over Star Minerals Ltd’s (ASX:SMS) Tumblegum South Gold Project. The transaction terminates the associated royalty arrangement under the old Gabanintha agreement, but the announcement does not quantify the value or expected timing of income from the replacement royalty.

The deal is unconditional and completion is scheduled for two business days after signing. Albright must withdraw its caveats over the relevant AVL tenements and hand over technical and other information it holds, clearing the remaining administrative links between the company and the Gabanintha ground.

Golden Pike Becomes the Funding Priority

Albright said proceeds will mainly support Golden Pike in New Brunswick, which includes the Vail Road high-grade gold deposit and the exploration-stage Bond Road and Albright Brook gold and antimony prospects. The company described the project as prospective for gold, antimony and base metals, with access to road, rail, port and grid infrastructure, but this announcement provides no new exploration results or development timetable.

The immediate question is how much of the $1.75 million will be available as cash for exploration once the AVL shares are issued and sold. Albright is also exchanging direct rights in Western Australia for a royalty and a more concentrated Canadian project strategy, making the final share quantity, settlement and deployment of funds the next material markers.