OM Holdings has raised its stake in a manganese project, two days after joint venture partner Bryah Resources received a $5 million cash offer for its interest in the asset.
OM now holds a 30 per cent stake in the project, situated in Western Australia’s Bryah Basin.
Bryah holds the remaining 70 per cent.
The companies entered into a $7.3 million farm-in arrangement in 2019, which gave OM the option of earning a 70 per cent JV interest.
The Singaporean company has so far has spent $1.5 million on fees and exploration costs – including $500,000 announced today.
It has committed to spend a further $500,000, Bryah said today, which would increase OM’s stake in the project to 40 per cent.
The funds will go towards diamond drilling, density measurements and beneficiation testwork, and completion of mineral resource estimates for the project’s Horseshoe South, Brumby Creek and Black Hill prospects.
Drilling is expected to complete next month, while the other activities will continue into 2021.
Bryah’s diluted shareholding, as per the joint venture arrangement, would not affect the amount of cash it received for its stake in the project, managing director Neil Marston said.
“Until such time as the intended sale of Bryah’s remaining JV interest is completed we will continue managing exploration activities as planned,” Mr Marston said.
The offer from Primero and AMCI remains subject to a number of conditions including approval from Bryah shareholders.
The company recently said it intended to accept the offer.
Its shares were down 4 per cent at 3:53pm AEDT to trade at 7.2 cents.