04/11/2014 - 14:50

Liontown accepts discounted settlement

04/11/2014 - 14:50

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Perth-based Liontown Resources says it will accept just $465,500 to satisfy an outstanding settlement around the sale of its Liontown base metal deposit in Queensland to collapsed miner Kagara, which was later offloaded to Red River Resources.

Liontown accepts discounted settlement

Perth-based Liontown Resources says it will accept just $465,500 to satisfy an outstanding settlement around the sale of its Liontown base metal deposit in Queensland to collapsed miner Kagara, which was later offloaded to Red River Resources.

In 2009, Liontown sold the deposit and surrounding exploration tenements to Kagara for $4.5 million.

The consideration comprised of two tranches, the first being an immediate issue of Kagara shares to Liontown worth $2.25 million at the time.

The second tranche was to be a cash payment of $2.25 million on either a formal decision to mine the Liontown deposit, or if it was sold to a third party, however Kagara was placed in liquidation in 2012 subsequent to the sale.

In July this year, FTI Consulting, Kagara's administrators, sold the collapsed miner's remaining Queensland assets, including Liontown, to Red River for $6.5 million.

In a statement today, Liontown said the sale of Kagara’s operations to the explorer had triggered the second tranche.

“Liontown has now agreed to accept the sum of $465,500 as full and final settlement of the outstanding consideration,” it said.

Liontown shares closed unchanged at 2 cents per share.

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