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(Sharecast News) - Thor Energy announced a significant development on Monday involving signing an agreement between EnviroCopper (ECL) and Andromeda Metals (Andromeda).
The AIM-traded firm said the core of the agreement was the acquisition of exploration licence 5984 on the Yorke Peninsula in South Australia.
Thor currently holds a 30% equity interest in ECL.
The agreement would consolidate the Alford West Joint Venture (JV), specifically focused on the in-situ recovery joint venture alongside other ISR amenable targets within licence 5984.
Notably, the consolidation would mean that ECL would now have 100% ownership of the assets.
In terms of compensation, Andromeda would receive 5% of ECL's current capitalisation, equivalent to 203,008 shares, and a cash payment of AUD 50,000 (£26,583).
Additionally, Andromeda would be entitled to deferred consideration in the form of a 10% share of any successful mining operation's royalty tenement operating cash flow.
Thor said the deferred consideration would apply to the Alford West Project area, not exceeding AUD 15m, and the Moonta Project area, not exceeding AUD 15m.
Additional benefits for Andromeda were contingent on certain milestones.
On completing a site environmental lixiviant test (SELT), Andromeda would be issued an additional 2.5% of ECL's capitalisation, equivalent to 101,504 shares.
Furthermore, once a mining lease was granted, Andromeda would receive an additional cash payment of AUD 0.15m, as well as royalty payments derived from operating cash flow.
The initial 5% payment to Andromeda will result in Thor Energy's equity interest in ECL being diluted from 30% to 28.6%.
"The consolidation of EL 5984 allows ECL to actively pursue in-situ recovery copper investigations at the Alford West Project area whilst considering new discoveries across the tenement," said managing director Nicole Galloway Warland.
"Thor looks forward to ECL expanding its exploration options for ISR of copper, as well as advancing site investigations at the Alford West Project.
"As the Alford Copper Belt extends through both Thor's Alford East project, and the Alford West area, all investigative activities are a positive advancement to the in-situ recovery assessment of the area."
At 0947 GMT, shares in Thor Energy were up 3.66% at 1.5p.
Reporting by Josh White for Sharecast.com.
