Bryah offloads Lake Johnston lithium-nickel to shift focus to core JV
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Bryah is focusing on its near-term production assets by reaching an option agreement to sell 51% of its non-core Lake Johnston lithium-nickel project to Mining Green Metals.
While the project is prospective for battery metals, the company’s focus on its well developed Bryah Basin Manganese joint venture with OM Holdings (ASX:OMH) and the Gabanintha copper-nickel-cobalt-base metal projects along with exploration of the Windalah VMS copper-gold project means that it is unable to give it the attention it deserves.
This will be addressed through the option agreement with Mining Green Metals, which will undoubtedly be required to meet minimum – as yet unrevealed – exploration expenditure to earn its 51% stake if it proceeds with the acquisition.
Bryah Resources (ASX:BYH) will retain exposure to any upside in the project through its remaining 49% interest in the endeavour, which consists of eight exploration licence applications covering 690km2 close to the Mount Holland lithium mine and the historical Maggie Hays/Emily Ann nickel deposits.
“The Lake Johnston tenements are prospective for battery metals lithium and nickel and the Bryah team has completed reconnaissance to follow-up on existing data and geological mapping,” chief executive officer Ashley Jones said.
“The Lake Johnston assets deserve a dedicated exploration effort and team, which will be able to be provided by inclusion in a company with the technical, human, and financial resources to advance these exciting assets.”
MGM is paying the company $25,000 as an option fee with an exercise period of 12 months.
Completion of the agreement is dependent on MGM undertaking due diligence following which it will pay Bryah 5 million MGM shares if it decides to proceed.
A second option period of 12 months relates to the acquisition of Byrah’s remaining 49% interest and will require the payment of a further 5 million MGM shares if it is executed.
With MGM looking to launch an initial public offering at 20c per share, this places the value of the MGM shares to be issued to the company at $1m for the initial 51% stake and $2m for the overall transaction.
This is an excellent return for the three tenements that the company had acquired from West Coast Minerals for less than $200,000 ($75,000 in cash and 2 million BYH shares) back in November 2021.
The remaining five tenements that make up the Lake Johnston project were applied for by Bryah.
This article was developed in collaboration with Bryah 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.