Auravelle Metals has agreed to divest its Skeleton Rocks Project in Western Australia to Forrestania Resources for $250,000 in cash or shares. The deal remains subject to due diligence and other conditions, as Auravelle narrows its exploration focus to Nuckulla Hill and Crown.
- Skeleton Rocks to be sold through the disposal of Sipa Exploration
- $250,000 consideration payable in cash or Forrestania shares
- Transaction remains conditional on due diligence and customary approvals
- Auravelle to concentrate resources on Nuckulla Hill and Crown
Skeleton Rocks Sale Agreed
Auravelle Metals Ltd (ASX:AUV) is selling the Skeleton Rocks Project in Western Australia to Forrestania Resources Limited (ASX:FRS) for $250,000, giving the explorer a cleaner portfolio as it concentrates on its higher-priority assets.
The transaction is structured as the sale of 100% of Sipa Exploration, the Auravelle subsidiary that holds four Western Australian tenements: E77/2783, E77/2918, E77/2706 and E77/2708. Forrestania can settle the consideration in cash or fully paid ordinary shares, at its election.
Cash or Scrip Consideration
If Forrestania chooses shares, the number issued will be calculated using a $250,000 value divided by Forrestania's 10-day volume-weighted average price immediately before the agreement was executed. The announcement does not disclose the resulting share count, leaving Auravelle's eventual exposure dependent on the selected payment method and the relevant market price.
The agreement is not yet unconditional. Forrestania must complete legal, financial and technical due diligence within 21 days of signing, while other customary conditions precedent must also be satisfied or waived. Settlement is scheduled for five business days after those conditions are cleared.
Exploration Focus Narrows
Auravelle Managing Director Andrew Muir described the sale as the completion of the company's portfolio streamlining. The company says it will focus its exploration resources on Nuckulla Hill in South Australia's Gawler Craton and the Crown Project near Kalgoorlie in Western Australia.
Auravelle said shareholders could retain exposure to any future value from Skeleton Rocks if Forrestania elects to pay in shares. That potential exposure, however, depends first on due diligence being completed, the remaining conditions being dealt with and Forrestania choosing scrip rather than cash.
Bottom Line?
The immediate catalyst is not exploration news but transaction completion: Forrestania's due diligence and its cash-versus-scrip decision will determine what Auravelle ultimately receives.
Questions in the middle?
- Will Forrestania elect to issue shares or pay the $250,000 consideration in cash?
- Will due diligence uncover any issue that delays or prevents completion?
- How will Auravelle deploy the proceeds or retain any Forrestania shares across Nuckulla Hill and Crown?