Highlights:
- Binding agreement signed with Haranga Resources Ltd (ASX:HAR) to sell 100% of the Lincoln Mine, Sutter Creek, California, USA
- Haranga to issue 40 million shares to Seduli on completion, providing immediate value to Seduli shareholders, with an additional 120M performance-based shares available upon meeting key development milestones.
- Seduli shareholders will gain exposure to Haranga’s growth strategy and expanding project pipeline and liquidity through listed shares
- Seduli to have representation on Haranga Board and management input
Seduli Holdings (Australia) Ltd (“Seduli”) is pleased to advise it has signed a binding share sale agreement with Haranga Resources Limited (ASX: HAR) (“Haranga”) to sell its Lincoln Gold Project in California, USA through the sale of 100% of the shares of Seduli Holdings (USA) LLC, Seduli’s wholly-owned US subsidiary which in turn wholly owns Seduli Sutter Operations Corporation, the direct owner of the Lincoln Gold Project.
After conclusion, this transaction will provide Seduli shareholders with the opportunity to realise the growth potential of the Lincoln Mine through equity exposure to Haranga, an emerging ASX-listed company with a track record of successful resource development. Seduli is confident that Haranga has the technical and financial capability to unlock the potential of the Lincoln Gold Project, including through near-term aggressive drilling campaigns intended to increase the overall size of the Project’s gold resources and to convert the existing NI43-101 resource estimate to JORC. The project’s substantial infrastructure, existing mining permits, and proximity to major mining regions mean that Haranga is well-positioned to rapidly progress the project toward production.
Seduli’s Managing Director Toby Davis commented: “This transaction represents a very positive outcome for Seduli and its shareholders, enabling the company to realise value from the Lincoln Gold Project while providing exposure to Haranga’s existing projects. Haranga has demonstrated its commitment to developing world-class mineral projects, and we are confident the Company will unlock the full potential of Lincoln. Following completion of the transaction Haranga will be fully funded to advance key work programs at the Lincoln Gold Project, which if successful should then position the project to become a significant gold operation.”
The Lincoln Mine is near production-ready, with existing permits allowing for up to 315,000 tonnes of ore per annum to be processed. Haranga’s commitment to fast-tracking the project’s exploration and development will provide significant upside potential for both Haranga and Seduli shareholders.
As part of the agreement, Haranga will issue 40 million Haranga shares to Seduli upon completion of the transaction. These shares will be subject to a six-month escrow period, excluding up to $500,000 carve-out for necessary working capital to cover transaction expenses and existing corporate liabilities. In addition, Seduli is entitled to receive up to 120 million performance rights, which will convert into Haranga shares on a one for one basis upon achieving key project milestones within 24 months of completion of the transaction. The transaction also includes the settlement of Seduli’s existing corporate debt obligations of circa $1.7m through the issuance of Haranga shares.
The milestones associated with the vesting of Seduli’s 120 million performance rights are:
- 20 million shares upon successful confirmation that the Lincoln Gold Project’s existing drilling data can be used for a JORC-compliant resource estimation after QA/QC checks and conformation sampling;
- 20 million shares upon commencement of drilling at the project, this will trigger the above shares if not triggered already;
- 40 million shares upon the announcement of a JORC-compliant resource of at least 300,000 ounces of gold at a minimum grade of 5 grams per tonne (g/t) gold with a cut-off grade of 2 g/t gold; and
- 40 million shares upon the announcement of a JORC-compliant resource of at least 400,000 ounces of gold at a minimum 5 g/t gold with a cut-off grade of 2 g/t gold, or upon defining an exploration target of between 200,000 and 400,000 ounces at the Keystone prospect.
Haranga has also agreed to assume all existing obligations associated with the Lincoln Gold Project, including royalty obligations and debt agreements. Haranga proposes to restructure certain of the existing obligations associated with the Lincoln Gold Project to ensure a clear pathway to development.
The existing 1.5% NSR to Deterra Royalties will be reduced to 0.75% upon repayment of US$1.453 million.
The completion of this transaction remains subject to financial, technical, and legal due diligence, along with shareholder and regulatory approvals. Following completion, Haranga plans to undertake an aggressive exploration and development program as soon as possible, including undertaking between 1,500 and 2,500 meters of underground diamond drilling to convert the existing resource into a JORC-compliant estimate.
For further information, please contact:
Toby Davis
Managing Director
Seduli Gold
Phone: +61 409 282 893