The agreement is subject to several conditions including the purchaser receiving commitments for a capital raising of not less than A$12 million to fund the acquisition.
() has signed a non-binding and exclusive term sheet with () to sell the Mt Ida Project for total consideration of A$11 million.
Mt Ida, which is considered non-core, is around 120 kilometres from Ora Banda’s Davyhurst Processing Facility in Western Australia.
Investors responded positively to the news with Ora Banda shares as much as 29% higher today to A$0.12.
One of the key terms of the term sheet includes that both have to enter into a formal agreement documenting the details of the transaction contemplated by the offer within seven days of accepting it.
As per the sheet, the purchaser has the responsibility of completing legal, financial and technical due diligence on the Mt Ida asset within 14 days, including tax matters and structuring of the proposed transaction.
Besides this, TNT Mines will have to ensure that it receives binding commitments to raise A$12 million to fund the acquisition within seven days of accepting the offer.
The agreement is also subject to the receipt of all necessary regulatory and third-party consents, waivers and approvals within seven days of execution of a formal agreement between both companies.
Ora Banda, however, clarifies that whilst the execution of a definitive agreement cannot be guaranteed at this stage, it is confident that a formal agreement can be negotiated and signed on the proposed terms within seven days stipulated in the agreement.
The company looks forward to working with TNT Mines towards a successful sale completion.