LONDON (ShareCast) - (Sharecast News) - Strategic Minerals announced on Wednesday that it has received an AUD 0.1m (£0.05m) payment from Axis Mining & Minerals for an exclusive six-month call option to acquire 100% of the Leigh Creek Copper Mine (LCCM) in South Australia.
The AIM-traded firm said the option could be extended by mutual agreement.

If exercised, the deal would see Strategic Minerals receive an initial cash payment of AUD 1.9m.

In addition, subject to Axis completing a planned listing on the ASX in Sydney, Strategic would receive equity in the listed entity equivalent to 19.9% of its issued capital, up to a maximum of AUD 3m in value.

The agreement also included an earn-out provision under which Strategic Minerals would receive up to AUD 4m in half-yearly payments, equal to 20% of net free cash flows from LCCM once commercial production begins.

If the equity component fell below the AUD 3m threshold due to the ownership cap, the earn-out will be increased to compensate for the shortfall.

The transaction, if completed, would mark Strategic Minerals' full divestment from LCCM, while retaining long-term exposure to its future cash flow and equity upside.

At 1239 BST, shares in Strategic Minerals were up 0.59% at 0.29p.

Reporting by Josh White for Sharecast.com.

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