RNI up on gold assets sale to MLX

RNI shares leapt this morning on news that the company is selling its Grosvenor gold project to Metals X in a scrip deal that will help the company refocus on its copper assets.

The company is also set to announce the under-subscription of its May 28 pro rata entitlements offer, which was intended to raise $25 million.

The Grosvenor, Horseshoe, and Peak Hill projects will be sold to Metals X for 18 million shares, which have a total current value of approximately $20.5 million.

RNI will retain rights over all copper interests in those projects and acquire Metals X’s Chunderloo copper-gold project for 25 million RNI shares.

The agreement, which was negoited by GMP Securities, also includes a $300,000 interest-free loan to RNI for working capital, convertible into shares at the price of RNI’s next capital raising.

Metals X will have a first right of refusal on any future sale of RNI’s current copper-gold assets.

With the proceeds of this deal, RNI plans to repay some of its $23 million debt facility to Taurus Resources No. 2 Fund.

The Metals X deal was conditional upon the grant of an extension of RNI’s debt facility, an extension which RNI reported later in the day.

As a requirement of the extension RNI must reduce its debt by $1 million by August 6.

RNI said that the sale of its gold interests would significantly reduce expenditure commitments to about $1.2 million a year, down from its current annual expenditure commitment of over $3 million.

The company said that the improved financial position of the company will enable it to refocus of its Bryah basin exploration activities.

Metals X chief executive Peter Cook said the acquisition of Grosvenor was a good deal for the company.

“We have acquired a substantial gold resource base with all the plant and infrastructure in place for an exceptional price,” he said.

“It is a good fit to the company’s portfolio and will benefit from some synergistic benefits from our Central Murchison gold project at Meekatharra, which is currently in the development phase.”

RNI shares were trading at 2.3 cents a share, up 53 per cent at 1030 AWST today, while Metals X was up 0.5 cents to $1.135 a share.