Andromeda Metals Limited
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Why has Andromeda Metals sold their interest in the Wudinna Gold Project to Cobra Resources?
Andromeda Metals Limited (ASX: ADN) has announced the sale of their 25% interest in the Wudinna Gold Project to Cobra Resources plc. This sale involves the transfer of tenements related to the project in exchange for $500,000 in cash and $1,000,000 worth of shares in Cobra.
Background: The Farm-in and Joint Venture Agreement
Back in October 2017, Andromeda, through its subsidiary Peninsula Resources Limited (PRL), entered into a farm-in and joint venture agreement (Farm-in) with Lady Alice Mines Pty Ltd (LAM) to advance the Wudinna Gold Project. In March 2019, Cobra acquired LAM, which is listed on the London Stock Exchange.
Under the Farm-in agreement, LAM earned a 75% interest in five tenements covering 1,832 km2 on South Australia's Eyre Peninsula. They invested $5 million in exploration efforts to uncover potential gold and rare earth elements (REE) deposits.
The Sale Agreement
Andromeda has now decided to sell its remaining 25% interest in the Wudinna Gold Project to LAM.
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This transfer will take place either through a tenement transfer or by utilizing the sub-division process outlined in section 30AA of the Mining Act 1971 (SA).
In return, Andromeda will receive $500,000 in cash and $1,000,000 worth of shares in Cobra, priced at GBP 1 pence each.
Conditions and Completion
The completion of the Sale Agreement is subject to a few conditions precedent. First, Cobra needs to successfully raise $500,000 in capital. Second, they must secure the necessary shareholder approval to issue the shares as consideration. Lastly, any required third-party consents for the transaction must be obtained.
Andromeda's CEO and Managing Director's Statement
Bob Katsiouleris, CEO and Managing Director of Andromeda, highlighted that the sale of these tenements aligns with the company's strategy of divesting non-core assets. This move aims to support the commercialization and development of their primary project, The Great White Project.
Katsiouleris emphasized that the recent sale of the Drummond Epithermal Gold Project, along with the sale of the Wudinna Gold Project, reflects their strategic focus on securing the necessary funding for The Great White Project. This funding is crucial for making a final investment decision and commencing construction.
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