AUZ’s Sconi purchase to be finalised this week
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
In September this year, Australian Mines (ASX:AUZ) announced it would be purchasing the Sconi project in North Queensland from Metallica Minerals Limited (ASX:MLM), a project which had been a farm-in joint venture between the two companies.
Today AUZ has announced an amendment to the Sale and Purchase Agreement (SPA) which will see any remaining conditions precedent waived, with the intention to complete the transaction by Friday, 8 December. In exchange for varying the agreement, AUZ has agreed to pay a non-refundable A$1 million to MLM within two business days.
As such, both companies are taking the necessary steps to have the SPA completed by this Friday, with all other terms for the SPA remaining as initially advised in September.
The SPA stipulates that AUZ will pay A$10 million in cash and shares to become the 100 per cent owners of the Sconi Project, allowing MLM to focus its strategy on its other assets.
The Sconi cobalt-nickel-scandium project is considered the most advanced one of its kind in Australia, particularly considering there are mining approvals in place as well as an advanced Bankable Feasibility Study. In terms of in-situ resource size/grace, metallurgy, geology and expected resource recoveries, Sconi has been likened to Clean TeQ’s Syerston nickel-cobalt-scandium project in NSW.
The current JORC Resource for Sconi, as announced 31 March 2017:
- Measured 17Mt at 0.80% nickel, 0.07% cobalt
- Indicated 48Mt at 0.58% nickel, 0.07% cobalt
- Inferred, 24Mt at 0.41% nickel, 0.06% cobalt
Of course, as with all minerals exploration, success is not guaranteed – consider your own personal circumstances before investing, and seek professional financial advice.
Management is of the view that the significant disparity between AUZ and CLQ’s market capitalisations appears to have created an arbitrage situation, whereby investors can gain exposure to the cobalt-nickel market via AUZ at a material discount to its peers.
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.