7th Oct 2013 09:55
LONDON (Alliance News) - Aurum Mining PLC Monday said it has entered a letter of intent that could see Plymouth Minerals Limited buy 80% of Aurum's Morille tungsten project in northwestern Spain.
The deal would see Australia's Plymouth pay EUR300,000 in cash and shares for the 80% stake with a non-refundable EUR25,000 paid for a thirty-day exclusivity period and a further EUR225,000 cash payable if Plymouth opts to go ahead with the acquisition.
Aurum also would receive EUR50,000 in new shares of Sydney-listed Plymouth 12 months on from any exercise of the option.
Plymouth also will retain the right to buy the remaining 20% in the project from Aurum at a price of GBP2.5 million.
"In response to very challenging market conditions, the company previously stated its intention to seek strategic investors and industry partners to assist in funding its portfolio of gold and tungsten projects in North West Spain. The proposed deal will not only ensure the on-going funding of the Morille project, but will also enable Aurum to realise some cash and to retain a significant residual stake in a highly prospective project," Aurum Chairman Sean Finlay said in a statement.
If Plymouth were to dispose of its interest in the Morille project within the first 24 months of owning it, Aurum would be eligible for a 30% share of Plymouth's profits from the disposal.
Aurum shares were Monday quoted at 2.66 pence, up 0.16 pence, or 6.4%.
By Samuel Agini; [email protected]; @samuelagini
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