RareX has signed an agreement to divest its 35% asset level interests in several exploration licences in New South Wales (NSW), Australia, to its joint venture (JV) partner, copper-gold explorer Kincora Copper.
Under the agreement, RareX will sell a 35% stake in the Condobolin, Cundumbul, Fairholme, Jemalong and Trundle exploration licences.
In exchange, RareX will receive 40 million Kincora Chess Depositary Interests (CDIs) and a 1% net smelter return royalty (NSR).
Along with the deal, Kincora has also undertaken an oversubscribed placement of A$2m ($1.32m) at A$0.05 per share.
Following the placement and transaction, RareX will become the largest shareholder in Kincora, holding approximately 45 million shares (18%) in the company.
RareX already owns five million shares in Kincora.
In a press statement, RareX said: “Consolidating project ownership and removing the existing carried interests increases the strategic value of the NSW project portfolio for all Kincora shareholders. The portfolio already attracts interest from mid-tier and industry majors.”
As part of the agreement, RareX chairman Jeremy Robinson will join the Kincora board.
RareX chairman Jeremy Robinson said: “The time has come to vend our NSW exploration interests to Kincora, clearing the path for a major to take over the funding and add to the exploration of these world-class projects. I look forward to assisting in growing Kincora’s portfolio.”
The transaction is subject to the securing approvals by the companies required under the Mining Act 1992 (NSW), among others.
Earlier this year, Kincora announced its decision to undertake a strategic review process of its Mongolian asset and licence portfolio to maximise shareholder value.
