S2 Resources Ltd (ASX: S2R) has advised that (following due diligence) Outback Goldfields (TSXV: OZ) and S2 have entered into a letter of intent (LOI) in which Outback will purchase S2’s Finnish assets, also known as Sakumpu, for C$7M.
Outback intends to undertake a concurrent non-brokered private placement to raise C$5M as an integral condition of the transaction to position itself to explore S2’s highly prospective land holding in the Central Lapland Greenstone Belt (CLGB) of northern Finland, and in particular, advance drilling of the Aarnivalkea gold prospect near Agnico Eagle’s Kittila gold mine.
The proposed transaction will provide S2 with C$1.5M cash to supplement its existing treasury, and C$5.5M worth of Outback shares.
It is anticipated that subject to the exact pricing and size of the offering, S2 will own approximately 35-45% of Outback on conclusion of the financing, thereby maintaining material exposure to the exploration upside whilst being able to focus its own funds on its Australian exploration activities.
As part of the transaction, S2 will also have the exclusive option to earn majority interests in Outback’s four Victorian gold projects, where Outback has recently identified several gold targets. These properties augment S2’s 100% owned Greater Fosterville project, which surrounds Agnico Eagle’s Fosterville gold mine.
The intended transaction is fully described in Outback’s TSXV announcement from 1 March 2024. It is anticipated that subject to various shareholder and regulatory approvals being received, a definitive agreement will be completed on or around 6 April 2024.
S2 Resources is an Australia-based company focused on mainstream commodities such as gold and base metals in politically stable jurisdictions. S2 Resources’ objective is to provide superior investment returns through the discovery and development of high value mineral resources, because of exploration and the identification of early-stage assets with high growth potential.
For further information, please visit: www.s2resources.com.au
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