Artemis completes acquisition of Fox Resources’ WA mining assets
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
Through finalising the acquisition of Fox Resources assets, Artemis Resources (ASX:ARV) has completed the purchase of the Radio Hill nickel/copper/cobalt metallurgical plant, the Radio Hill Mine and its JORC compliant resource base held within a 495 square kilometre tenement package in the Pilbara Region of Western Australia.
While ARV has acquired all of Fox Resources’ Western Australian mining and exploration assets for 28 million Artemis shares (at 10 cents), the company has also assumed the remaining liabilities of approximately $920,000, equating to an effective purchase price of $3,720,000, not including the additional $100,000 the company was required to pay in order to close the transaction by the end of April.
Consequently, this is slightly below the revised purchase agreement of $2 million and the issue of 20 million Artemis shares (not including the assumption of remaining liabilities), equating to $4 million.
However, the initial agreement which was struck on December 16 required the payment of $3.3 million plus $200,000 in fees, but excluded ARV assuming Fox Resources’ liabilities.
Acquisition of Radio Hill assets strategically valuable for Artemis
Despite the variations in consideration for the acquisition of Fox Resources’ assets over the last four months, there is no doubting their strategic value and the inherent savings that have been realised when compared with the costs involved in establishing new infrastructure from the ground up.
The acquisition of Fox Resources’ assets is part of the company’s strategy of creating a “Hub and Spoke” operation for the first time in the Karratha area with the aim of establishing a multi-metal production company and unlocking the growing cobalt, copper, nickel, zinc, gold, palladium, platinum and iron ore potential of the region.
ARV’s executive chairman, David Lenigas, also highlighted that ownership of these assets should add significant value to the potential development of the group’s Carlow Castle cobalt discovery.
He also noted that the significant tonnages of waste rock stockpiles at Radio Hill could also prove valuable as pre-mined quarry material for the new road and infrastructure works planned for the region over the coming years.
It should be noted that ARV is an early stage play, so seek professional financial advice if considering this stock for your portfolio.
Overseas institutional support for funding arrangement
ARV has opted for funding which will minimise earnings per share dilution with the company entering into an US$2million (~A$2.66million) funding agreement by way of the issue of Convertible Securities with an aggregate face value of US$2 million with a consortium of investors arranged by London based institution Riverfort Global Capital Ltd.
As well as providing funding for the Radio Hill acquisition, the agreement will provide working capital for a significant long-term asset and assist in the continued growth of the business of the company.
The Convertible Securities have a fixed conversion price of 12 cents per fully paid ordinary share, and are subject to certain conditions in the funding agreement and compliance with the ASX listing rules at the funder’s election.
ARV will not be obligated to make repayments during the first two months, and if the group’s share price is below 12 cents per share for any month of the loan period between the third month and the 16th month ARV can elect to make the repayment for any month in cash at 115% of the monthly redemption amount.
At ARV’s discretion, it can pay the monthly repayment in shares calculated as the lower of the 12 cents fixed conversion price or at 93% of the lowest daily volume weighted average price during the 10 trading days immediately prior to the monthly conversion notice date.
ARV will also issue the investors with 4.4 million options at an exercise price of 15 cents per share with an expiry date of three years from issue date and 4 million ARV shares as collateral to secure ARV’s obligations under the funding agreement.
It should be noted that share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.
These securities were issued under the company’s existing 15% capacity in terms of Listing Rules 7.1, dispensing with the need for shareholder approval.
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.
