Alien Metals Secures Joint Venture Partner for Silver Project
Why we think this is good
The RNS announcement details a conditional joint venture agreement with Errawarra Resources for Alien Metals' Elizabeth Hill Silver Project and Pinderi Hills tenements. This is a positive development as it provides Alien with a funding partner to advance the silver exploration and development, while retaining a significant 30% interest. The transaction terms appear reasonable, with Errawarra funding the project through to a decision to mine. Alien will also receive A$880,000 in cash consideration, which can be used to further develop their other projects. The announcement also highlights the significant exploration potential at the Elizabeth Hill Silver Project, which is an additional positive. Overall, this is a good outcome for Alien Metals, though the timeline to complete the transaction has some uncertainty due to the various conditions precedent.
Key Points
- Alien Metals conditionally secures joint venture with Errawarra Resources for Elizabeth Hill Silver Project and Pinderi Hills tenements
- Errawarra to acquire 70% interest and fund the project through to a decision to mine, Alien retains 30% free-carried interest
- Alien to receive A$880,000 in cash and 17.7% equity stake in Errawarra (before planned share sale)
- Transaction provides Alien with access to technical expertise and potential funding sources in Australia to advance the silver project
- Elizabeth Hill Silver Project has significant exploration potential with historical high-grade silver production
Summary
Alien Metals Limited has entered into a conditional joint venture agreement with Errawarra Resources Ltd to acquire a 70% interest in the Elizabeth Hill Silver Project and Pinderi Hills tenements in Western Australia. Errawarra will fund the project through to a decision to mine, while Alien will retain a 30% free-carried interest. Alien will receive A$880,000 in cash and a 17.7% equity stake in Errawarra (before a planned share sale). The agreement provides Alien with access to Errawarra's technical team and potential funding sources in Australia to advance the high-grade silver project, which has significant exploration upside.