Clean TeQ Completes Syerston Project Acquisition
Clean TeQ Holdings Limited (CLQ: ASX) is pleased to announce it has completed the acquisition of the Syerston Project in central New South Wales from a wholly owned subsidiary of Ivanhoe Mines Ltd (TSX: IVN).
The acquisition is a significant step in implementing the strategy to build Clean TeQ’s metal recovery business by identifying and securing projects which are able to be transformed into world class assets by utilising Clean TeQ’s innovative continuous ion exchange (Clean-iX®) technologies.
Acquisition Structure
Clean TeQ Metals Pty Ltd, a wholly owned Clean TeQ subsidiary, has acquired all the outstanding shares in Ivanplats Holding Company Pty Ltd, the Australian entity which owns Ivanhoe Mines’ interest in the Syerston Project.
The acquired assets include:
100% title to the Syerston exploration license and the six mining lease applications underlying the Project;
All environmental approvals and development consents previously obtained by the Syerston Project entity;
Freehold land comprising 2,884 hectares in total, underlying the mineral title; and
An existing bore field and water rights owned by the project company.
The consideration for the acquisition comprised:
7,373,053 Clean TeQ fully paid ordinary shares;
$100,000 cash, which was reduced to $32,000 at completion after netting off the value of assets and liabilities assumed by Clean TeQ as part of the transaction; and
A 2.5% gross revenue royalty on the Project payable to Ivanhoe Mines.
Clean TeQ has also issued Ivanhoe Mines a promissory note with a face value of A$3.0 million, payable in three years’ time and carrying a zero coupon. The note will enable Clean TeQ to evaluate options for retaining the freehold title in the farming properties as part of a development plan over the next three years. In the event that ownership of the freehold is not deemed critical to the project development plan, it can be sold, with the proceeds used to satisfy redemption of the note.
Clean TeQ Chairman Sam Riggall commented: “Completion of this acquisition is another important milestone for Clean TeQ in achieving our goal of becoming the global market leader in Scandium production. Syerston is a large scale, high grade Scandium resource located in a favourable jurisdiction with critical water rights already in place. Clean TeQ is also fortunate to benefit from a number of key environmental and planning approvals already in place which will enable the fast tracking of development.”
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The Scandium resource model is currently being used as the basis for a Scoping Study to confirm the capital and operating costs of a full-scale operation. The scoping study is on track to be completed during Q2, 2015. A drilling campaign will commence shortly in these high grade zones with the aim of increasing the high-grade resource base. As part of this drill campaign, a bulk sample will also be taken from the project to commence piloting for the production of scandium oxide samples for customer testing and qualification purposes.
Syerston’s very high Scandium grade, combined with Clean TeQ’s proprietary Scandium extraction and purification technology, means that the Company is uniquely placed to produce large tonnages of low-cost Scandium for the industrial alloy, additive layer (3D printing) and fuel cell markets in the near future. Clean TeQ has Collaboration Agreements in place with both Airbus and KBM Affilips to develop the scandium market for aerospace and other industrial sectors.
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