Jolimont-based gold explorer RMG says it will buy its joint venture partner Chile Metals Consulting’s 25 per cent interest in the Tuina copper project in South America for a share package worth $2.4 million.
Under the terms of the deal, RMG will issue around 40 million of its shares and 16 million options to Chile Metals, which in turn will assign a $US1.5 million debt owed to it by Sociedad Contractual Minera Porvenir to RMG.
Chile Metals will retain a 2 per cent royalty over the project’s permits, excluding the Porvenir permits, however, RMG has the option to purchase half of that royalty for $US10 million.
Chile Metals will also retain a 0.5 per cent royalty over the Porvenir permits.
The South American company also has the option to appoint a member to RMG's board.
“The transaction substantially simplifies the structure of the original joint venture and provides a clear ownership structure for the future development and financing of the Tuina project,” RMG said in a statement.
The transaction is subject to shareholder approval.
Following a $2.8 million capital raising in July, RMG began geophysical surveys, drilling and studies on Tuina’s 170km2 district in September to evaluate the project’s potential.
The results are expected to be published by the end of the month.
RMG shares were 3.2 per cent lower at 6 cents per share at 10:30am.
