Metals X sells tin project for $250,000

East Perth-based Metals X has reached agreement to sell its Collingwood tin project to Icon Resources for an upfront payment of $250,000.

Under the arrangement, Icon will acquire all the shares and assets of Bluestone Nominees, a wholly owned subsidiary of Metals X that holds the tin project.

Sydney-based Icon said it was keen to acquire the project, which contains a tin concentrator that will be benefit its nearby Mt Carbine project.

Included in the deal is the issue of a $3.75 million convertible note from Icon to Metals X, a $896,000 loan to Icon and a placement of 5 million shares to Metals X.

Shares in the placement are priced at five cents each.

The announcement is below:

Metals X Limited ("Metals X") advises that it has today reached agreement to sell its wholly owned subsidiary, Bluestone Nominees Pty Ltd, the owner of its Collingwood Tin project to Icon Resources Ltd ("Icon").

Icon is the owner of the Mt Carbine Tungsten Mine in Far North Queensland with an evolving business plan to develop the project in three stages:

Stage 1 - Re-treatment of tailings plus exploration drilling;

Stage 2 - Open pit mining and processing;

Stage 3 - Underground mining.

Icon has advised they have significantly advanced the Mt Carbine project and the next step is to acquire a processing plant. Icon believes the idle Collingwood Tin Concentrator will significantly advance that requirement and has reached agreement with Metals X to acquire it with Metals X providing significant backing for them to do so.

Icon will acquire all the shares and assets of Bluestone Nominees from Metals X which include the Collingwood Tin Project, significant remaining undeveloped tin resources and the remaining Collingwood tin project plant and infrastructure.

The terms of the heads of agreement are:

1. An upfront payment of $250,000.

2. Icon issues a 3 year term Convertible Note to Metals X for a sum of $3.75M at a coupon rate of 7.5%. Conversion of the note can take place any time after 12 months has elapsed by giving one month's notice. Conversion can be at the higher of 5 cents per share or the volume weighted average price (VWAP) of Icon's shares in the 3 months prior to conversion.

3. Metals X agrees to make a loan of $896,200 to Icon at a rate of 7.5% for a term of thirteen months to enable Icon time to repay/cover environmental performance bonds on BNPL mining assets. Metals X has the election on maturity to elect to have the debt settled by equity in Icon at the higher of 5 cents per share or 80% of VWAP in the month the loan falls due.

4. Metals X will hold a first-ranking, fixed and floating charge over Icon's assets, but will not object to any second-ranking charges.

5. Metals X will take a placement of 5 million shares at 5 cents per share in Icon.

6. That the conditions precedent be achieved before May 29, 2009.

The Conditions Precedent include the following:

1. Icon completing an additional minimum raising of $500,000.

2. Shareholder approval for the terms of the convertible note and loan.

3. Satisfactory completion of due diligence.

Metals X believes the agreement provides them with exciting exposure to Icon's Mt Carbide tungsten project and a sound outcome in the disposal of its Far North Queensland tin assets.