(Alliance News) - Gunsynd PLC on Friday said its investee Sunshine Minerals Ltd is to be bought by Malachite Resources Ltd.
The investment company will receive 1.3 million upfront shares in Malachite Resources and 1.6 million deferred shares upon the completion of the transaction
Malachite Resources will pay an initial consideration of USD850,000 via the issue of up to 10.6 million shares to the remaining 85% of shareholders. Malachite Resources already owns 15% of Sunshine Minerals.
Another payment of USD1.1 million via the issue of 13.8 million shares will be paid by Malachite Resources upon the application for a mining lease for the prospecting licence tenement PL 01/18, held by Sunshine Nickel Ltd, which is 80% owned by Sunshine Minerals.
PL 01/18 is located on the south coast of Santa Isabel Island in the Solomon Islands and is home to the Jejevo Nickel project.
The agreement is subject to the following conditions: Sunshine Minerals must enter into an agreement with Sunshine Nickel and the landholders of PL 01/18 for the provision of funding by Malachite to the landholders for their portion of exploration and development costs relating to the Jejevo Nickel project; and Malachite Resources shareholders must approve the transaction.
Gunsynd said: "Gunsynd is pleased to be able to monetise this investment, subject to completion, by way of shares in a listed ASX company, albeit subject to restrictions on their disposal. With the recent uplift in nickel prices and strong interest in the sector given government mandates with respect to electric cars, we remain bullish on the prospects for nickel."
Gunsynd shares were down 1.2% at 0.96 pence each on Friday midday in London.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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Gunsynd (GUN)