Marmota inks $1M deal to divest South Australian copper project
Marmota Limited has inked a $1 million deal to sell its West Melton copper tenement in South Australia's copper-rich Yorke Peninsula to G4 Metals, securing a cornerstone equity position in the copper-focused IPO hopeful while maintaining the company's exposure to the emerging copper province.
The divestment of West Melton for $1M in G4 shares is contingent upon a G4 achieving a successful IPO capital raise before the end of next year. The deal includes potential performance payments to Marmota of up to $500,000 in shares tied to discovery milestones.
West Melton sits adjacent to the Hillside copper project, which was formerly owned and developed by Rex Minerals. MACH Metals - a subsidiary of Indonesia's largest conglomerate Salim Group - bought Rex last year for $393 million.
The all-cash takeover underscored the allure of the well-endowed Yorke Peninsula. The region has a widespread history of copper production and is expected to become South Australia's next copper production hub, as copper prices begin to soar. Hillside has a massive 1.9 million tonnes of copper and 1.5 million ounces of gold.
'This deal has been specially structured with G4 Metals... in such a way that Marmota's shareholders will continue to be exposed to the upside by taking a substantial stake in the new company.'
Marmota Limited chairman Dr Colin Rose
Marmota's all-scrip deal ensures shareholders retain a front-row seat to the region's copper potential while allowing the company to focus on its bevvy of South Australian opportunities, including the advanced Aurora Tank gold project and its recent Muckanippie titanium discovery.
Marmota Limited chairman Dr Colin Rose said: ' This deal has been specially structured with G4 Metals - a company being set up to advance copper projects in South Australia - in such a way that Marmota's shareholders will continue to be exposed to the upside by taking a substantial stake in the new company. We look forward to working with G4 to finalise the sale and to future success in developing these assets in a prime copper tenement, in an area with a proud history of copper mining. '
If G4's IPO does not materialise before 2027, Marmota can walk away from the deal. Further sweetening the pot, Marmota will pocket $250,000 in shares if a JORC resource exceeding 50,000 tonnes of copper is declared at West Melton or G4's Yorke Peninsula tenements, with an additional $250,000 in shares for a resource surpassing 100,000t.
Following Rex's takeover, MACH carried out a competitive global partnering search to fund Hillside's $843M development. Hillside's stage one reserves contain 505,000t of copper and 435,000 ounces of gold. MACH has expansion plans underway, driven by a gold price sitting some US$1000 (A$1540) per ounce higher than at the time of its acquisition.
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