Allup Silica (ASX: APS) has acquired 100% of an advanced Valuable Heavy Mineral Sands Project near Eucla, WA.
The McLaren VHMS Project (E69/2388 and E69/2386) comprises 333 sq. km, located on the western side of the Eucla Basin, adjacent to the Fraser Range in Western Australia,
McLaren is an advanced-stage exploration project with an indicated and inferred Mineral Resource estimate of 280Mt @ 4.8% Heavy Mineral for 13.5Mt in-situ HM completed in 2022.
"This project presents an excellent opportunity for Allup Silica to fulfil its plan of moving into production,” Managing Director, Andrew Haythorpe, said.
“Albeit a different sand, the mining and washing processes for ilmenite are similar to silica sand, as well as the near-surface mineralisation and low strip ratios. However, the higher product price and lower shipping volumes present a compelling opportunity for development.
“Because of the previous work completed and the increasingly high value of titanium minerals, this opportunity presents a faster and higher confidence pathway for Allup Silica and its shareholders.
“The ground is accessible in all seasons of the year, allowing for more rapid progress. Infill drilling and further metallurgical work is planned to commence as soon as practicable so that we can advance a Pre-Feasibility Study and move onto a Bankable Feasibility Study for the project."
The company has agreed to pay the following consideration:
- $150,000 in cash for 100% of ELs
- Allup grants a 1.5% Royalty to the vendors (Westover Holdings Pty Ltd and Wild Side (WA) Pty Ltd)
- Allup will issue 2.0m options exercisable at 20c on or before five years from issue, with consideration of $0.001 per APS share, with a vesting condition being completion of a Bankable Feasibility Study and the Ilmenite concentrate sales exceeding US$500/t from the Project
- 4,241,571 shares upon completion of the Pre-Feasibility Study (PFS); (PFS Milestone); and
- A further 4,300,583 shares will be issued upon completion of a Feasibility Study (FS Milestone).
The PFS Milestone is satisfied upon completion of a Pre-Feasibility Study on commercially viable terms and other criteria that the Parties agree in writing.
In the event that the PFS Milestone is not achieved within 24 months, the Parties agree to enter into good faith negotiations for a period of 5 business days with a view to agree an alternative basis on which the PFS Milestone Shares (or any part thereof) may be issued to the Vendors.
Subsequent to the PFS Period, the purchaser agrees to use all reasonable endeavours to conduct a Bankable Feasibility Study in respect of the Tenements.
Placement
The acquisition will be funded from internal cash sources, however, the company has decided to undertake an additional placement and has received binding commitments for approximately $360,000 via the issue of shares to sophisticated, professional and institutional investors at an offer price of $0.04 per share.
