OZ Minerals in friendly takeover of Cassini Resources to clinch full ownership of West Musgrave project

OZ Minerals (ASX: OZL) plans to acquire full control of Australia’s largest undeveloped copper-nickel deposit with a takeover of Cassini Resources (ASX: CZI).

But Cassini’s other projects — a greenfield gold target and a nickel one — will not be part of the takeover and will instead go into a new listed vehicle, Caspin Resources.

Cassini’s board has unanimously recommended the offer, which will see its remaining 30% of the West Musgrave nickel-copper-cobalt-platinum group metals project in Western Australia go into OZ Minerals. Major shareholders in Cassini (owning 17.4% of the junior) will vote for the takeover agreement.

Cassini shareholders will get a three-part payout: one new OZ Minerals share for every 68.5 Cassini shares (valued at $0.15 per share), a $0.01 per share cash payment out of Cassini’s existing cash balance, and a pro-rata distribution of shares in the new Caspin Resources.

Longer term, Caspin may also receive additional cash payments of up to $20 million if OZ Minerals sells West Musgrave; that deal is above the implied value of the present takeover.

Caspin will list on the ASX with its 100%-owned Mount Squires gold project and the 80%-owned Yarawindah Brook nickel ground.

OZ takes full control of West Musgrave

OZ Minerals has been involved with West Musgrave since 2016 when it signed an agreement with Cassini to earn a 70% interest in the project.

The pre-feasibility study released earlier this year outlined a 26-year mine life for the project with an annual output of 28,000t of copper and 22,000t of nickel.

OZ Minerals chief executive officer Andrew Cole said the acquisition is the natural evolution of “a strong and effective working relationship” with Cassini. This has made possible an agreement between the two companies on the best value path forward.

“This acquisition gives OZ Minerals 100% ownership of the project, allowing flexibility regarding future funding and development opportunities,” he said.

Cassini chief executive officer Richard Bevan said this is an opportune time for his shareholders to realise value from the West Musgrave project and the directors are excited at the prospect of launching a new company.

Caspin‘s two large projects

The new Caspin Resources will proceed with projects that have been explored previously, returned promising indicators, but were then dropped as companies focused on other targets.

Adjoining West Musgrave is the Mount Squires gold project, which Cassini has been developing since 2015 by consolidating tenements and now has a 50km-long structural corridor to investigate.

The former Western Mining Corporation undertook mapping in the 1990s and then in the early 2000s, the former Beadell Resources carried out sampling. In both cases, the project was dropped as the respective companies switched exploration plans.

In 2019, Cassini completed its maiden drill program at the Handpump prospect comprising 10 holes for 1,134m of reverse circulation drilling. Results included 20m at 1.27 grams per tonne of gold, including 7m at 2.54g/t gold from 23m.

The Yarawindah project was drilled in 2007 with results including 7m at 1.30% nickel.