I find it interesting that the above announcement didn't seem to elicit any discussion here.
Given the silence, I may as well step out of the shadows for a moment and attempt to follow the breadcrumbs.
So, the sale of that Texas project referred to here relates to the announcement released by this company back in December of last year ('Sale of Texas Project', released 06/12/22).
Let's jump into our tardis for a moment, and head back to the not-so distant past, so as to review the particulars of that transaction.
The key points of the deal are as follows (the extract below is taken directly from the December announcement):
...WGH will purchase all of the assets of Thomson in relation to the Texas Project, including:
o 2 Mineral Leases (ML) and 7 Exploration Permit Minerals (EPMs) (see Annexure 1
for details);
o 4 freehold properties (see Annexure 1 for details);
o 2 Environmental Authorisations (see Annexure 1 for details);
o Various plant & equipment associated with the mining operations;
o The existing Provided Financial Assurance;
o All mineral resources, including in the heap leach pads, heap leach circuit and low
grade stock piles; and
o All mining information.
WGH will take on all existing and future environmental liabilities and will take full operational
control of the Texas Project effective from the date of the Agreement.
The Consideration to be paid to Thomson will be approximately A$3.5M, payable as follows:
o A$50,000 within 5 Business Days of the date of the Agreement;
o A$150,000 on Completion;
o 1% Net Smelter Royalty (“NSR”) on any of the following ore or minerals extracted
from the Tenements - silver, gold, zinc and copper contained in current Thomson
published Mineral Resource Estimates for Twin Hills, Mt Gunyan and Silver Spur and
material on the Heap Leach Pads at the Texas Site; and
o An amount equal to the Existing Bonds (“Bond Amount”)(~A$3.3 million), which
shall be paid by WGH to Thomson by WGH paying 50% of the Net Operating Margin
for the processing of minerals at the Texas Site into an account nominated by TMZ
on a monthly basis until the full Bond Amount has been paid to TMZ.
During the period prior to Completion of the transaction, WGH shall be entitled to undertake
activities leading to a restart of the processing plant and the processing of the material on
the Heap Leach Pads, at its sole cost.
Completion is subject to the following Conditions Precedent and will occur 5 Business Days
after the satisfaction (or waiver) of the Conditions Precedent of:
o Receiving the Minister’s indicative approval of the transfer of the Tenements to WGH;
and
o All necessary approvals are in place for WGH to operate at the Texas Site for the
purposes of its planned processing of the materials on the heap leach pads,
with the Conditions Precedent to be satisfied or waived on or before 31 December 2023...So, potentially this deal is worth $3.5 million to TMZ, even if we assume that no royalties eventuate (although that assumption might be a little on the pessimistic side, given that Warwick seemed willing to part with millions of dollars to buy us out).
Prior to this week, Thomson had received precious little of this money, excepting the 50K that Warwick Gold promised to hand over within the first few days of this agreement.
However, with the sale now complete, Thomson looks like they are set to receive the second tranche of funds, the $150k mentioned above.
Importantly, the completion of this deal also means that Thomson no longer bear responsibility for the liabilities associated with the project.
That should keep the wolves at bay for a little while longer, at the very least.
That leaves the remaining $3.3 million up in the air. Does Thomson have any real chance of bagging this bounty, or is this simply wishful thinking?
Well, on that question, I'd suggest that it perhaps may not be entirely coincidental that the deal seems to have been finalised the very same week that silver price straddled that US $25 barrier.
Perhaps just the thing to incentivise Warwick to get the things moving, asap?
At this point, it remains to be seen how things will pan out here. However, I would cautiously suggest that the sealing of this deal might prove to be one of the first signs that Thomson is not for heading oblivion, as seems to have been the consensus view here of late.
Needless to say, if Thomson does eventually end up receiving the remaining $3.3 million dollars, that would be of material significance, given that the current TMZ market cap sits at a little under $4.4 million.
It now looks like there might be a possibility - at the very least- that this company ends up netting a small fortune from that deal with WGH.
Putting that aside for the moment, the company is also still sitting on a string of interesting looking projects, including the Conrad and Webbs projects formerly owned by Silvermines, as well as, it would seem, a number of gold projects, with perhaps the most promising being Harry Smith (though in their recent dash for cash they seem to have disposed of a few others, such as the Chillagoe project).
And this at a time when the silver price is pushing above $US 25, and the gold price seeming to hold above the $2000 level.
Needless to say, Thomson aren't quite out of the woods yet.
But one thing is for sure: if Thomson does manage to extract itself from its current predicament, and I think this is looking increasingly likely, you can be sure that they won't be needing to raise capital at 0.002c once trading in the stock resumes.
If the trading halt is lifted within the next few weeks, I can't see how a share price around the half a cent mark would be in any way warranted.
Silvermines, who are still one of the largest shareholders in this company, are currently sitting on a market cap nearly one hundred times that of TMZ, based on the price this stock last traded.
It sometimes happens that the best time to buy a stock, is the very time that everyone seems to be screaming 'sell'.
This is something I saw years ago with Global Geoscience, back when that stock was also hovering around the half-a-cent mark. Let's hope that Thomson likewise proves to be an example of a 'dog stock' that turns into a 'dog star'.
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