Caprice Resources has signed a binding option agreement with private company HJH Nominees to acquire 90% of the Bantam project in the prolific West Arunta region of Western Australia.
The project comprises one granted tenement and three tenement applications over 1,470 square kilometres of land considered highly-prospective for niobium, rare earths and iron-oxide-copper-gold mineral deposits.
It is believed to be one of the largest landholdings in the region.
Targeting carbonatites
Caprice chair Glenn Whiddon said the tenement package was highly prospective for targeting carbonatites and associated mineralisation.
“A land package of this size with very little exploration work to date is an exciting prospect and we will be aiming to replicate the success of our peers through targeted, strategic exploration,” he said.
“We look forward to progressing due diligence with a view to expediting the process and commencing exploration activities in earnest.”
The acquisition is not subject to the approval of Caprice shareholders.
World-class location
Bantam shares a 30km-long border with the West Arunta project owned by WA1 Resources and home to the world class Luni niobium-rare earths deposit.
Since Luni’s discovery, the area has been actively explored by companies including Encounter Resources at the Crean and Emily discoveries), CGN Resources at the Hathi rare earths prospect), Rio Tinto and private explorer Tali Resources.
Key geophysical and structural features identified on the Bantam tenure from desktop reviews show similarities to regional features seen on neighbouring niobium and rare earth prospects.
Mr Whiddon said the company would undertake active fieldwork to pursue the highest priority targets.
Terms of the deal
Under the terms of the deal, Caprice will pay the vendor a non-refundable option fee of $30,000 in return for a 30-day period of due diligence.
Consideration for the acquisition will comprise a $1.03 million payment and a series of deferred milestone payments including a total $1m when the first two tenement applications are approved and a further $100,000 on approval of the third.
The vendor will be granted a 2% gross production royalty on the sale of any minerals extracted from the project area.
If the vendor decides to divest the royalty in whole or in part, Caprice will be given right of first refusal to acquire it.
Caprice will also be granted the right to buy-out 25% of the royalty (being 0.5% of the total 2%) for $20m at any time during the period between completion of the acquisition and the start of commercial production.
Ongoing joint venture
Once the transaction is complete, Caprice and HJH Nominees will form an unincorporated joint venture over the tenements, where the equity split will be 90% and 10% respectively.
Caprice will free carry the vendor until a decision to mine is made over any of the Bantam deposits.
During this time, Caprice will sole fund all exploration activities and will retain the sole right to determine the nature and content of work including operations, budgets, methods and timing.
The company is expected to spend at least $200,000 in exploration at Bantam’s granted tenement before June.
Facilitation fee
Caprice has agreed to pay a fee to HP Investments as consideration for facilitating the acquisition and assisting in the achievement of its strategic objectives.
The fee will comprise 18m Caprice shares and 25m options exercisable at $0.03 before 2027.
The company has confirmed that 50% of the shares and all of the options will be issued on completion of the acquisition, while the remaining 50% will be issued at the time of the second deferred milestone payment.
Caprice shareholders will be required to approve the fee structure.
If approval is not obtained, the fee will be issued as a cash payment.
Capital raising
Caprice has received firm commitments to raise $1.5m through the placement of 88m shares to institutional, professional and sophisticated investors priced at $0.018 each, with a 1:4 free attaching option exercisable at $0.03 before 2027.
The shares will be issued in two tranches and will rank equally with existing shares on issue.
Caprice directors have committed to collectively subscribe for $184,500 worth of shares.
Proceeds from the raising will be used to meet funding considerations on completion of the Bantam acquisition, as well as exploration activities at the Bantam, Mukinbudin (rare earths), Northampton (polymetallic) and Murchison (gold) projects.
