LONDON (Alliance News) - Nyota Minerals Ltd on Tuesday said it has signed a deal to sell its 70% interest in KEC Exploration Ltd to a minority shareholder which, when completed, will leave Nyota as a cash shell.
KEC Exploration holds the Ivrea nickel and copper project in Italy, which is at a "very early stage and will require substantial capital investment" to continue the exploration programme and to develop the tenements. As the cash was not available to Nyota, it had previously resolved to contribute no further cash to the project and to find a buyer.
On Tuesday, Nyota said it was selling the stake in KEC to Christopher Reindler, a minority shareholder and a director of KEC, subject to approval by its shareholders. The initial cash consideration for the 70% interest is EUR12,500 immediately following approval of the disposal on or before March 1, or EUR20,000 if shareholders do not approve the disposal before March 1.
Nyota will retain a 3.0% net smelter return payable on future sales from the project, to be calculated as 3.0% of the net revenue from the project. However, the agreement also provides for a buyback of the net smelter return by Reindler for AUD200,000 in the first two years and AUD400,000 in the third and fourth years following execution of the deal.
Nyota said any proceeds from the sale will be used as working capital, and following completion it will cease to own any trading businesses, activities or assets.
The group will need to make an acquisition within six months of completion of the deal, failing which its shares will be suspended from trading on AIM, under AIM rules. If the group then fails to make an acquisition which constitutes a reverse takeover within a further six months, its shares will then be cancelled from AIM, under AIM rules.
Nyota pointed to its announcement in November that it plans to acquire Philippines-based BigDish Ventures Ltd, and that it was working towards completing the acquisition. The group on Tuesday said it was continuing to prepare documentation necessary for the its shareholders to consider the purchase.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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