After remaining in a trading suspension since May last year, Carbine Resources (ASX: CRB) revealed this morning it had secured a binding agreement to acquire Cockatoo Iron, which owns the Cockatoo Island project.
Under the agreement, Carbine will issue the vendors with almost 291.5 million shares – representing about 48.75% of Carbine.
Carbine will then appoint Alex Passmore, Myles Schammer and Patrick Murphy as non-executive directors to its board.
As part of the deal, Carbine plans to raise $3.2 million via the issue of 106.6 million securities at $0.03 each.
AMCI has agreed to participate in the issue as a cornerstone investor and will subscribe for $2.5 million-worth of the shares.
Once complete, this is expected to give AMCI a 13.88% interest in Carbine.
Cockatoo Island project
Carbine’s rationale behind the Cockatoo Iron acquisition is its Cockatoo Island project in Western Australia’s north.
The project is believed prospective for iron ore and has hosted historic iron ore operations dating back to the 1950s.
Cockatoo Iron is exploring for high-grade iron ore primarily within the island’s inland areas and has two granted miscellaneous licences and a mining lease.
There are also to pending applications – one for an exploration licence and the other for another miscellaneous licence.
In advancing the project, Cockatoo Iron has planned a high-impact exploration program in an area of known mineralisation.
The company will be looking for high-grade mineralisation in commercial quantities, as well as evaluating economic development of lower grade hematite material.
Available infrastructure includes island access via an airstrip, a workshop/office and potable water bore field.
Trading suspension and acquisition conditions
The acquisition remains subject to multiple conditions including successful due diligence, completion of the capital raising, plus shareholder and ASX approvals.
Additionally, with being in a trading suspension since May last year, the deal also is contingent on Carbine re-complying with ASX regulations and its securities being readmitted to official quotation.
On the 21 May last year, Carbone requested a pause in trading, which was followed by a request for voluntary suspension on the 23 May.
In the suspension announcement, Carbine noted it was pending the release of its response to an ASX Price Query.
The query asked Carbine to provide an explanation of why its securities lifted from $0.03 on 8 May 2019 to a high of $0.042 by 21 May 2019.
In this morning’s response, Carbine claims it was not aware of any loss of confidentiality regarding the proposed acquisition of Cockatoo Iron – pointing out on the 30 April it had told the market it was assessing “a number of exploration and mineral development opportunities”.
However, Carbine did concede “it is possible” the trading of its securities prior to the trading halt may “in some part” be explained by its negotiations to acquire Cockatoo Iron.
Despite the concession, the company went on to state it was “firmly of the view that such negotiations did not affect the trading activity in its securities prior to entering into a trading halt and the details of the proposed transaction remain confidential”.
In early morning trade, Carbine’s shares remained in a trading suspension.