Corcel plc has restructured its nickel-cobalt assets in Papua New Guinea by signing a 50-50 joint venture (JV) deal to create a new carried vehicle.
JOINT VENTURE
JV partner Integrated Energy Metals (IEM) is a new American company whose website states is focused on building “a world class battery supply chain”.
The companies will establish Integrated Battery Metals (IBM) which is intended for listing in either Australia or Singapore.
In October 2022, Corcel signed a memorandum of understanding with Shandong New Powder COSMO AM&T (NPC) for a Singapore-based JV, which included the IEM’s interest in the Doncella lithium project in Argentina.
Corcel’s Mambare (40%) and Wowo Gap (100%) projects in PNG will be held in the JV alongside IEM’s 4.04% interest in Hanacolla S.A., owner of Doncella “with additional lithium and other battery metal interests expected to follow”.
Corcel will own 50% of IBM, benefit from a US$1.5m carried interest, a 1.5% gross revenue royalty on Wowo Gap, and nominate half of the IBM board.
PROJECT LOSSES
Corcel reported losses attributable for 12 months ending 30 June 2022 to its 41% interest in Mambare of £3,300 with a further £170,200 to the 100% interest in Wowo Gap.
Losses attributable to Hanacolla for Doncella until 31 December 2022 were $1.66m, of which some $67,000 was attributable to IEM’s 4.04% interest.
AGREEMENT TERMS
The transaction is conditional on Corcel’s partner in the Mambare project waiving pre-emption rights during a 45-day review period and the transfer of Hanacolla shares into IBM.
IEM will deposit US$1 million of initial funding of Corcel’s carried interest into IBM’s bank account via a convertible loan structure.
Consent and assignment of Corcel’s existing gross smelter royalty over Mambare to IBM is also needed.
PORTFOLIO
“We are pleased to announce the signature of this joint venture, which both funds near term spend on our PNG nickel assets and positions them in a broader portfolio ready for a standalone listing,” added chief executive Scott Kaintz.
“Progression of this transaction is a major step forward in Corcel’s strategy to build a non-operated and carried portfolio of upstream battery metal projects alongside new oil and gas opportunities, including in Brazil where the company sees unique and significant opportunities at this moment.”