ASX-listed Australian Vanadium has inked an option with unlisted Mining Green Metals (MGM) for the sale of its Coates project and Nowthanna Hill project tenements, in Western Australia.

The Coates project holds exploration potential for base metals, gold and platinum group elements, while the Nowthanna Hill uranium project includes a granted mining licence and a mineral resource estimate of 3.6-million tonnes at 337 parts per million.

“With Australian Vandium’s primary focus being the development of the Australian Vanadium project at Gabanintha, the option agreement offers Australian Vanadium shareholders continued exposure to exploration success at the Coates and Nowthanna Hill projects in a focused exploration company,” said MD Vincent Algar.

“Australian Vanadium will retain an interest in the projects and be able to benefit from the suite of potential minerals at Coates which are currently in high and growing demand and the future potential from the Nowthanna Hill project.”

Under the terms of the option agreement, Australian Vanadium will receive 6.5-million fully paid ordinary shares in MGM, and a 0.75% net smelter return royalty from the value of the minerals mined at Coates, along with a cash payment of A$190 000.

If the option is not exercised during the 12-month exercise period, it will lapse.

The transaction is subject to MGM completing a due diligence, and the company receiving listing approval from the ASX to be admitted to the official list. MGM is planning to list on the ASX in 2022.