What's Happening?
Alchemy Resources, an ASX-listed company, has entered into a binding option agreement with Newcam Minerals, a private miner, allowing Newcam to earn up to a 60% stake in Alchemy's Bryah iron-ore assets.
The agreement involves Newcam paying A$500,000 for a six-month option period to conduct due diligence, with an additional A$500,000 payable upon exercising the option. Alchemy will retain a 40% interest in the projects, free carried to a decision to mine. Newcam will also subscribe for 10 million Alchemy shares at a premium, providing immediate funding for Alchemy. The partnership aims to accelerate the advancement of Alchemy's iron-ore assets while maintaining exposure to future project upside.
Why It's Important?
This agreement is significant for Alchemy Resources as it provides immediate financial strength and validates its strategic direction. The partnership with Newcam Minerals, a company with a proven track record in mine development, positions Alchemy to advance its iron-ore projects more rapidly. The deal enhances Alchemy's balance sheet and growth potential, offering shareholders increased exposure to project development. For Newcam, the agreement represents an opportunity to expand its operations and leverage its expertise in iron-ore production. The collaboration could lead to increased mining activity and economic benefits in the region.
What's Next?
During the option period, Alchemy plans to conduct a maiden drill program at the Valley Bore prospect to test hematite exposures and advance geological understanding. Newcam will assume operatorship of the iron-ore assets once the option is executed, potentially leading to further development and production activities. The parties aim to finalize a definitive agreement within six months, maintaining the current option framework. This development could attract further investment and interest in the Bryah iron-ore projects.
