Bramfield sale to compound value of Oar’s core projects
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Oar has reached an agreement to sell its non-core Bramfield iron ore project in South Australia to Vietnam’s Dragon Resource Investment for $500,000 in cash.
The sale is part of the company’s ongoing strategic review to rationalise its portfolio and where possible, generate cash from its non-core assets to apply towards the flagship Crown nickel-copper-platinum group element project in Western Australia and its gold assets.
For Oar Resources (ASX:OAR), the sale is a big positive given that Bramfield had previously been written down to nil value. This means the cash consideration represents significant additional non-dilutive funding that will help strengthen its balance sheet.
Managing director Justin Richard said the sale of Bramfield is a great outcome for the company as it was not adding value and had not been a priority at any stage.
“More important than injecting $500,000 cash into the company is how the company uses this and other funds to compound value on its core project assets,” he added.
“With graphite, gold, nickel, copper, PGE and halloysite-kaolin projects still in hand, we envisage the revised project portfolio to be focused on a stable of one or two core projects that we consider capable of advancing toward feasibility study, with the most promising projects being retained.
“Any non-core asset that can be divested to raise cash and increase OAR’s value and its ability to leverage other projects will be considered.”
Bramfield is located on the Eyre Peninsula in South Australia and sits within Exploration Licence 6558.
It was one of the original assets of Oakdale Resources and has been considered a non-core asset for considerable time given the company’s focus on its Crown project in the Julimar district, Douglas Canyon gold project in Nevada and the Gibraltar halloysite-kaolin project in South Australia.
The Bramfield project area will be excised by conditional surrender, and the remaining portion of EL6558 will be retained by the company.
Dragon, a subsidiary of The Hoa Phat Group, has paid a $100,000 deposit and will pay the remaining $400,000 on the settlement date three months from 10 February.
This article was developed in collaboration with Oar Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.