Strickland Metals Limited (ASX:STK) has entered into a binding asset sale agreement with Northern Star Resources pursuant to which the company will sell its interests in the tenements comprising the Millrose Project in Western Australia.
We are very pleased to deliver such a transformative sale for shareholders in a relatively short period of time,” Strickland CEO, Andrew Bray, said.
“The Millrose Project was purchased for $10 million in mid-2021. After a highly successful 11 month drilling campaign throughout 2022 costing approximately $16 million, we are now selling the project for approximately $61 million, generating an approximate $35 million profit for the company.
“We are also exceedingly pleased that we have been able to deliver such a strong outcome for shareholders given the ongoing difficult market conditions for junior exploration companies. This transaction leaves Strickland in the highly envious position of having one of the strongest balance sheets in the junior exploration space.
“We are confident of advancing and upgrading a number of additional gold prospects along strike to a standard similar to Millrose. Horse Well, Cowza and several other prospects will be the immediate focus of upcoming gold exploration programs. The company will also be able to expedite some exploration programmes around the highly encouraging Iroquois base metal discovery.”
Terms of the Transaction
The company will receive the following consideration for its interest in the Millrose Project:
- A$2 million cash deposit paid on execution of the Agreement (Deposit);
- Cash consideration of A$39 million payable on completion of the Transaction which is expected to be no later than 30 business days; and
- 1.5 million fully paid ordinary NST shares, to be issued on completion of the Transaction subject to 12 months escrow.
In the event that the Transaction does not complete, the Deposit will convert into a loan which will be repayable by the company to NST within 30 days from the date of termination of the Agreement.
As a result of the Transaction, NST will acquire the company’s interest in the Millrose Project, including a Mineral Resource comprising 6Mt @ 1.80g/t Au for 346,000 ounces (see announcement dated 23 June 2021 for full details of Millrose Mineral Resource) and the company will retain an Inferred Mineral Resource comprising 5.77 Mt @1.40g/t for 257,000 ounces.
Proceeds from the Transaction
Following completion of the Transaction, the company will retain its Horsewell, Dusk til Dawn, Yandal East, Baxters and Iroquois Projects which are proximal to the Millrose Project and all located in the highly gold endowed Yandal Greenstone Belt in Western Australia. Strickland’s focus will be to aggressively upgrade its portfolio of gold prospects to a standard similar to that of Millrose.
