Reaches Multi-Million Dollar Deal On Greenland Asset
Platina Resources Limited (ASX: PGM) will create more than A$8.3 million in value from the sale of its wholly-owned Skaergaard project in Greenland with the signing of an agreement with Canada’s Eastern Zinc Corporation.
Platina will receive on C$0.5 million in cash and C$7.15 million worth of Eastern shares for the project which is host to one of the world’s largest undeveloped palladium resources with a significant gold endowment.
On completion, Platina will become a major shareholder in Eastern and have a right to a board seat. Eastern will be renamed and become a palladium focused exploration and development company following completion of the transaction and look to expand its portfolio of palladium assets.
Eastern recently completed a C$2 million capital raising and has a potentially significant pool of capital available.
Platina Managing Director, Corey Nolan, said the deal unlocked value in the project which is expected to grow with the help of substantial financial and technical resources.
“The challenge for a company our size is that Skaergaard requires a significant capital investment to keep the licences in good standing and advance the project through the drilling and feasibility stages,” Mr Nolan said.
“Eastern has the cash resources and an exploration and geological team based in the northern hemisphere that will be dedicated to developing the project.
“This deal will allow Platina shareholders to share in the project’s prospective value increase while providing Plana with an injection of new funding to pursue other opportunities. Platina has canvassed some of its major shareholders, who believe that this strategy of disposing a non-core asset is appropriate at this time” he said.
Mr Nolan said Eastern’s planned sizable investment in drilling and technical studies would significantly boost the project’s potential to be one of the world’s most advanced palladium projects. The transaction will be subject to final confirmatory due diligence and regulatory approvals in Australia and Greenland. The Greenland Mines Department recently renewed Skaergaard’s exploration licence for a further three year period (December 2022) and waived all the 2020 tenement expenditure obligations.
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