Perth-based Eclipse Metals (ASX: EPM) has agreed to divest its interests in certain Northern Territory uranium tenements including its Ngalia Basin prospects and the Liverpool project to upcoming IPO Oz Yellow Uranium.
The sale will allow Eclipse to focus on its mineral assets in Greenland, while maintaining exposure to the nation’s Top End through a share issue once Oz Yellow has completed its planned ASX listing.
The company intends to conduct a fully underwritten initial public offering to raise at least $20 million to facilitate the process, after which it will distribute 60% of its fully-paid ordinary shares to Eclipse.
Half of this amount will be distributed in-specie to Eclipse investors in proportion to their existing Eclipse shareholding.
The IPO will include a $2 million top-up offer to allow Eclipse investors to acquire further Oz Yellow shares above their allocation.
Eclipse will also receive $255,000 cash from Oz Yellow and a 4% net smelter return royalty in return for the assets.
Northern Territory focus
The proposed transaction will create a new listed company with a sole focus on exploration and development of the Northern Territory projects.
Eclipse executive chairman Carl Popal said it would allow the company to focus on advancing its other assets, including the mothballed Ivittuut cryolite mine in Greenland.
“As the projects in our portfolio continue to advance, it is important that we ensure our money and time are committed to those we believe will have the best chance of returning value for our shareholders,” he said.
“By divesting these assets into Oz Yellow, Eclipse will be able to focus its energies towards our key projects in Australia and Greenland while retaining significant exposure to a company that will be solely focused on the development of an exciting suite of uranium assets in the Northern Territory.”
The Ngalia Basin is centred approximately 300km west-northwest from Alice Springs and is considered highly prospective for sandstone and paleochannel-style uranium-vanadium mineralisation.
Eclipse holds two granted exploration licences and six licence applications over a combined area of approximately 4,773 square kilometres situated within the extensive uranium-mineralised region.
At the Liverpool project, Eclipse is focused on the Devil’s Elbow, Terrace and Ferricrete uranium prospects, concentrating on high-priority areas defined by historical geochemical and radiometric anomalies as well as relatively-unexplored ground south of the Ranger Fault.
The Devil’s Elbow prospects are believed to have strong similarities with the Jabiluka uranium and gold mine discovered in 1971 and located around 75 kilometres to the west.
The sale is subject to a number of conditions precedent, including the parties obtaining all shareholder and regulatory approvals to give effect to the Proposed Transaction (including ASX finding the structure of Oz Yellow to be acceptable), Oz Yellow receiving application to subscribe for Oz Yellow Shares to raise at least $20 million under an IPO and Oz Yellow receiving conditional approval from ASX regarding its admissions to the official list of the ASX.