Mineral Commodities (MRC) has signed a share purchase agreement (SPA) involving the sale of its Skaland Graphite Project to Norge Mineraler, a Norwegian mineral exploration company.
This transaction aligns with MRC’s business objectives, enabling the company to focus on its high-quality graphite projects including the Munglinup Graphite Project in Australia and downstream active anode plans.
The agreement involves MRC’s subsidiary, MRC Graphite Norway, selling 100% of its shares in Skaland Graphite, the project operator, to Norge Mineraler.
The SPA outlines a total purchase price of $11.75m (A$18.49m). This includes a non-refundable exclusivity fee of $250,000, a refundable deposit of $1m and $10.5m payable upon completion.
MRC will also be restricted from competing with Skaland’s business in Norway for three years following the transaction.
Norge Mineraler will assume all liability exposure related to Skaland, excluding intercompany loans.
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Key conditions include Skaland repaying or converting all intercompany loans to equity and obtaining necessary third-party consents including company shareholder approval.
MRC CEO Scott Lowe said: “This is a critical transaction representing a major turning point for MRC. The aim of this deal is to transform MRC into a much simpler, more focused company with a clearer path to value growth.
“Selling Skaland will allow MRC to strengthen its balance sheet and concentrate entirely on the Munglinup graphite project in Western Australia and the downstream active anode project. The company’s streamlined business strategy will be to advance and develop these two excellent projects and take advantage of the global focus on critical and battery minerals that includes graphite.
“MRC will also continue good faith negotiations with its JV [joint venture] partner with the objective of increasing its interest in Munglinup from 51% to 100%.”
The transaction’s proceeds will be applied to various financial obligations including creditor payments and general working capital.
A condition precedent to the completion of the SPA is obtaining shareholder approval, with a general meeting expected to be convened in the first week of February 2025.
Skaland’s sale marks a significant step in MRC’s strategic realignment, allowing the company to streamline operations and allocate resources more efficiently.
The focus on the Munglinup Graphite Project is expected to bolster MRC’s position in the graphite market, leveraging its high-quality assets to drive future growth.
Bacchus Capital Advisors provided financial advice on the transaction, with legal counsel from Gilbert + Tobin in Australia and Magnus Legal in Norway.
