The Urquhart Heavy Mineral Sands project forms part of The Cape York Bauxite and HMS Project Joint Venture held 50% by Metallica Minerals’ wholly owned subsidiary, Oresome Australia Pty Ltd who is the manager of the Joint Venture and the remaining 50% is held by a private Chinese investor, Ozore Resources Pty Ltd.
The Urquhart Point HMS project is located 3 km southwest of Weipa.
In 2019, both JV parties entered into binding term sheets for the sale of their 50% interest’s in the HMS tenements (ML 20669 and ML 20737) and the plant. The Company is pleased to advise that on 31 March 2020 a payment of $650,000 (excluding GST) was received as part of the second instalment.
The sale of the HMS assets is subject to the JV partner also selling their 50% interest.
Subject to the above, this second instalment will trigger the commencement of the process of formally transferring the HMS tenements to the buyer.
Metallica has agreed to the delay of the payments of $96,040 and $250,000 (excluding GST) that were due with the second instalment until 10 April and 27 April 2020 respectively, to enable the transaction to proceed during these uncertain times.
Metallica will also receive a refund of the Environmental Bond which was valued at $124,975 as at 30 December 2019.
A further $500,000 for the HMS plant is due by 25 June 2020. Subject to the successful completion of the sale, the total combined cash to be received by Metallica is $1.7 million.
As the buyer is a private entity, it is not guaranteed the sale will complete and the full purchase consideration will be received. The sale of the HMS plant will only complete if the HMS tenements are acquired by the buyer and all payments have been made.
In addition, the sale of the HMS assets will not complete unless the Joint Venture party also sells its interest in the HMS tenements and plant to the buyer.
The Environmental Management Plan for the Urquhart Point Project was approved on 7 April 2016.