Corcel plc has sold 20% of its Mt Weld rare earths project for A$1 million (£500,000) cash to a shareholder company controlled by nominated non-executive board member Antoine Karam.
JOINT VENTURE
The sale is to Italian private investment company Extraction Srl which currently holds 9.61% in Corcel.
Mr Karam was nominated to the board by Corcel’s cornerstone investor group which will hold 27.2% following completion of a recent £1m placing.
Corcel said that earn-in partner Riversgold Ltd had waived its pre-emption rights over the sale of the interest, and Extraction Srl is now a party in the joint venture.
On completion of the deal, Corcel will hold an 80% interest in Mt Weld pending results of the first 50% earn-in period, where Riversgold funds current work and is spending A$500,000 over twelve months.
If successful, the resulting shareholdings will be Riversgold with 50%, Corcel 30% and Extraction Srl 20%.
All parties would be responsible to pay their proportional share of the project’s future costs.
OIL AND GAS
Corcel added it was still considering how to use the proceeds, payable by 31 May 2023, from the partial sale of the Australian project.
For the period ended 31 December 2022, the 20% interest in Mt Weld being sold was held in in the company’s interim accounts balance sheet at £43,000, leaving a profit net of costs on sale of the interest of £475,472. .
“I am delighted to announce this partial de-risking of our Mt Weld asset ahead of drilling results at the project,” said chairman James Parson.
“The company will now focus on its first transaction following its recent pivot to oil and gas.”