31/03/2008 - 14:07

Reward offers 10% equity in Martu native title deal

31/03/2008 - 14:07

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Explorer and aspiring potash producer Reward Minerals Ltd has reached what is being touted as a ground-breaking native title deal to potentially give the Central Western Desert's Martu people more than 10 per cent of the company.

Reward offers 10% equity in Martu native title deal

Explorer and aspiring potash producer Reward Minerals Ltd has reached what is being touted as a ground-breaking native title deal to potentially give the Central Western Desert's Martu people more than 10 per cent of the company.
Shares in Reward jumped 25 per cent today, to hit $1.25, giving it a market capitalisation of about $67 million.The equity component of the deal involves options to be issued at a deep discount to Reward's current share price if the company succeeds in its plan to develop the Lake Disappointment potash project.
Reward said that subject to the appropriate approvals being obtained for the development, the terms of the deal included 7 million unlisted options exercisable at 50 cents with an expiry date of four years from issue, representing 10.31 per cent of the fully diluted capital of the company.
The deal, through which Reward hopes to accelerate its development, also provides for a cash component and royalties.
While the deal is yet to be finalised, sources close to the arrangements claim it is the first time such an equity arrangement has come to fruition and further reinforces the strength of the Martu people's native title claims.
Reward's announcement comes more six months after negotiations with the Martu reached an impasse, believed to be over their demand for an equity stake.
"While precise wording of terms of the agreement remain to be finalised, Reward Minerals is confident the details will be completed in an amicable and timely manner," Reward managing director Michael Ruane said in an announcement.
"Final approvals will require site specific archaeological and ethnographic Aboriginal heritage surveys, as well as statutory approvals."
"The negotiating parties are of the belief that the resultant agreement represents a win-win situation for all concerned."
In a release on behalf of the Martu people, their representatives said the deal was agreed by a full community meeting.
"We believe the presence of a generous indigenous equity component as part of the transaction is the way of the future in mining negotiations," the representatives said in a statement.
"Reward has offered equity in a bid to align the future interests of both parties - an innovative strategy which also acknowledges the strength of Martu rights."
The Martu have been represented in their negotiations by representatives of The Western Desert Lands Aboriginal Corporation and Indigenous Energy Pty Ltd, a business established 15 months ago by former Woodside Petroleum Ltd and Carnegie Wylie executive Joe Procter.
Mr Procter was one of the first indigenous Australians to complete an MBA and has also been on the board of the National Indigenous Council.

 

Below is announcement on the deal from the Martu representatives:

Indigenous Energy Pty Ltd (IndiEnergy), as exclusive commercial advisor for the Martu people, is pleased to announce that Western Desert Lands Aboriginal Corporation (WDLAC) as the prescribed body corporate holding on trust the determined native title rights and interests of the Martu people, the traditional owners of the land upon which Lake Disappointment is located, and Reward Minerals Ltd (Reward) have agreed commercial terms and signed a term sheet in relation to the Lake Disappointment potash project. This paves the way for a comprehensive mining agreement allowing Reward full access to test and ultimately develop their exciting potash development. Martu fully supports Michael Ruane, Managing Director of Reward, in his endeavours to accelerate the project to reach its full potential in a timely fashion.
Mr Joe Procter, Principal of IndiEnergy, said today:
These excellent commercial terms were recently accepted at a full community meeting after lengthy negotiations over an eight month period. We believe the presence of a generous indigenous equity component as part of the transaction is the way of the future in mining negotiations. Reward has offered equity in a bid to align the future interests of both parties - an innovative strategy which also acknowledges the strength of Martu rights. This outcome clearly demonstrates that progressive companies like Reward are respectful of Martu's rights and that Reward also appreciates the Martu's ability to act in a professional and commercial manner.
WDLAC Chairman, Mr Teddy Biljabu, Community Leader, Mr Brian Samson and WDLAC Chief Executive Officer, Mr Clinton Wolf, issued a joint statement today:
We fought long and hard to secure the Martu's native title rights and now reap the benefits of standing united. The Martu are a proud group of traditional desert people who possess significant native title rights. We expect honesty and fair value in exchange for our co-operation, along with an underlying assumption of equity in any project on our land.
By signing the term sheet with Reward, we have clearly demonstrated that we will support companies who respect us as the rightful owners, who offer fair value and who act in a transparent, professional and commercial fashion.
This agreement signals the end of us being treated like we are speed bumps in our own country.
We are pleased and excited to be moving forward with Reward on this project and will do everything in our power as true business partners to accelerate project development.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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