SYDNEY, AUSTRALIA: Poseidon Nickel Limited (ASX: POS) has entered into a Binding Heads of Agreement for the sale of its Lake Johnston Project to Mineral Resources Limited (MRL). The agreement, which is subject to certain conditions precedent, outlines a total cash consideration of $15 million for Poseidon.
The terms of the proposed sale include an initial non-refundable cash payment of $1 million upon execution of the agreement. Following this, Poseidon will receive $6.5 million on completion of a formal Sale & Purchase Agreement and a deferred payment of $7.5 million, payable 12 months post-completion. Additionally, Poseidon will retain a 0.75% FOB royalty on lithium minerals and a 1.5% net smelter return royalty on all other minerals and metals extracted from the Lake Johnston tenements.
This influx of $15 million will enable Poseidon to execute its strategic vision, which encompasses an exploration focus targeting high-grade nickel discoveries and the continuation of reduced care and maintenance activities at its Black Swan project. The company also plans to pursue new opportunities that align with its portfolio.
Craig Jones, CEO of Poseidon, expressed his optimism about the deal, stating, “The proposed transaction will crystallize value for our shareholders by monetizing one of our assets, allowing us to advance our exciting exploration targets at Windarra, maintain Black Swan as our near-term production asset, and explore new complementary opportunities.”
The divestment of Lake Johnston is expected to reduce Poseidon’s annual expenditure by approximately $1.4 million and eliminate the rehabilitation provisions for the project from its balance sheet. Coupled with cost reduction initiatives implemented over the past six months, the sale is set to strengthen Poseidon’s balance sheet and provide ample funding for its ongoing working capital needs and strategic execution.
Iress divests its UK mortgage business to Bain Capital for £85m