PERTH (miningweekly.com) – ASX-listed junior Red 5 has entered into an agreement to divest of its royalty entitlement from the Mt Cattlin lithium mine, in Western Australia, to Canadian royalty company Lithium Royalty Corporation (LRC).
Red 5 owns the right to receive A$1.50/t of ore processed from the Mt Cattlin mine, which is owned and operated by lithium miner Galaxy Resources.
Under the terms of the LRC agreement, Red 5 would receive A$11-million for its Mt Cattlin royalty, with A$7-million payable at the completion of the transaction, with approval from the Foreign Investment Review Board and the execution of a deed of assignment and assumption with Galaxy.
The balance of the agreed sum will be held in escrow and released in the June or September quarter royalty entitlement, in accordance with the sale and purchase agreement.
The June quarter royalty entitlement will be allocated 35% to the company and 65% to LRC, while the September quarter royalty onwards will be allocated 100% to LRC.