RE: Interview19 Sep 2024 05:00
Wow - To me RRR really aren’t in a good place and people really should take note of the additional terms in the Hot deal with POW ! In my opinion anyone buying now really needs to realise what’s going on here. -
Additional HoT terms
The HoT contains additional terms including, inter alia:
- POW will retain its existing Gross Production Royalty ("GPR") of 0.75% over the footprint covered by RRAL exploration interests.
- RRR will ensure key licence retention and specifically those licences containing the Ajax and Berringa mines.
- POW will retain the right to purchase any individual exploration licences that are to be surrendered by RRAL or where expenditure commitments will not be satisfied and a reduced expenditure has not been agreed, for consideration of A$1 per licence.
- From the date of the Agreement until Completion or the Long Stop Date, whichever shall be sooner, POW and RRR commit to contribute A$20,000 per month towards the costs of RRAL, with any further costs to that date being met by RRR.
- RRR has committed that no significant exploration interests of, or controlling interest in, NBGC/RRAL may be transferred out, or disposed of, or agreed to be so transferred or disposed by NBGC/RRAL, to another party without an opportunity being given to POW to match the terms offered by such other party; and
- Should RRR dispose in whole or part of any of the Interests within 12 months of the HoT, 15% of disposal proceeds after agreed costs will be payable to POW, or 5% in months 13-24 (the "Disposal Premium"). (Note: any amount payable under the Disposal Premium is capped such that the total aggregate Consideration for the Transaction shall not exceed 74.9% of Power Metal's market capitalisation as at the date of the Agreement, using the mid-market closing price of Power Metal ordinary shares on the trading day immediately prior to the date of the HoT).
- POW retains certain buyback rights in respect of its 49.9% holding in the event of a payment default by RRR exceeding 60 days from due date, save as caused by force majeure.
- POW holds a separate convertible loan note which together with interest and charges amounts to £94,400 of which £50,000 is payable in cash upon Completion and the remaining £44,400 is payable in cash two months after Completion, as part of the HoT.
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