Key points
- Eastern Metals divested the Thomson Project to Legacy Minerals in 2024
- Eastern Metals retained a 1.5% net smelter royalty on the Thomson Project
- Eastern Metals has now sold this 1.5% royalty to Red Hill Minerals for $220,000
Full summary
Eastern Metals Ltd (ASX: EMS) has announced that it has signed a binding Heads of Agreement with Red Hill Minerals Ltd (ASX: RHI) for the sale of the Thomson Project 1.5% net smelter royalty. In June 2024, Eastern Metals divested the New South Wales Thomson Project to Legacy Minerals Holdings Ltd (ASX: LGM) for $200,000 cash and the grant of the 1.5% net smelter royalty to Eastern Metals. Under the royalty documentation, Legacy Minerals holds a buy-back right, whereby one half of the royalty may be repurchased for $2 million, with the remaining half for a further $4 million. The total transaction consideration payable by Red Hill for the full 1.5% royalty is a one-off cash payment of $220,000 plus GST to Eastern Metals. Completion of the acquisition of the royalty is subject to satisfactory completion of due diligence by Red Hill, and execution of a Royalty Assumption Deed and a Royalty Security Assignment Deed. Red Hill holds exclusivity rights prior to completion while these conditions are being satisfied.