Riversgold Limited (ASX: RGL, Riversgold or the Company) announces it has signed a Memorandum of Understanding (MoU) with UK based New Generation Minerals Limited (NGM) whereby the parties have agreed to negotiate and use best endeavours to execute one or more formal agreements pursuant to which NGM will have the right to acquire the nickel and cobalt rights over a package of RGL’s Kurnalpi tenements in exchange for cash and shares in NGM or a related body corporate which is proposed to be listed on the ASX (IPO) (Proposed Transaction).
These tenements are highly prospective nickel tenements proximal to, or contiguous with, NGM’s Lake Yindarlgooda nickel-cobalt project east of Kalgoorlie.
Under the MOU, the parties have agreed that between the date of the MOU and 31 December 2023 to exclusively negotiate the binding formal documentation to effect the Proposed Transaction. NGM must within five business days of the date of the MOU, pay to Riversgold a A$25,000 non-refundable deposit.
Under the terms of the proposed agreements, NGM will acquire the rights to explore for nickel and cobalt mineralisation within a 364 km2 package of tenements owned by Riversgold. Refer to Figure 1 for location and tenements.
The parties will now look to exclusively negotiate and execute the formal agreements to effect the Proposed Transaction. Under the MOU, the parties have agreed certain indicative terms which are summarised as follows:
Sale and Purchase Agreement: NGM will, conditional upon listing, acquire E28/3034 (the Hampton Nickel Project) (subject to a reservation of other mineral rights including gold rights to Riversgold) and a two-year licence to explore for nickel and cobalt over various other 100% Riversgold owned Kurnalpi tenements.
In consideration, NGM will issue Riversgold A$1 million worth of shares in NGM which plans to IPO in early 2024. On executing the binding agreement, NGM will pay Riversgold A$25,000 cash. The two year licence period will commence on the date of listing. The details for the Sale and Purchase Agreement are shown in Tables 1 and 2 below.
Option Agreement: Riversgold will grant NGM a licence to explore for nickel and cobalt, and an option to acquire the nickel and cobalt rights, over E28/2580, E25/538, and E25/540 for consideration of A$3.7 million. The details for the Option Agreement are shown in Table 3 below.
In addition to the transactions contemplated above, Riversgold will use reasonable endeavours to facilitate NGM acquiring the nickel and cobalt rights over the tenements the subject of the Alloy Joint Venture. The Alloy Joint Venture between Riversgold and Stricklands Metals Ltd (ASX: STK) covers E28/2665 and E25/2599 – shown in grey in Figure 1. Riversgold is earning a 70% interest in the Alloy Joint Venture which was entered into in 2018.
Riversgold’s Kurnalpi Gold Project covers 880 km2 and is underlain by Archean greenstones. The Project located 50km east of Kalgoorlie, in the Eastern Goldfields region of Western Australia, represents one of the largest single landholdings in the region which has been relatively under explored due to a large portion of the tenements being covered by transported overburden including extensive shallow salt lakes.
The Company’s key prospect, the Queen Lapage Prospect, is a large geophysical and geochemistry anomaly, near the Randall Shear, a significant gold bearing shear zone. The Project was drilled in 2020/21 by Riversgold, where an innovative seismic technique over the salt lakes successfully targeted alteration below the salt lakes. However, due to a number of plaints by the Company’s former CEO, Mr Allan Kelly, Riversgold suspended exploration over the Project in 2022. In the year ending June 2022, the Company impaired the Kurnalpi Project by A$3.66 million as a result of the plaints and is aggressively defending its ownership over these tenements.
Arthur Darivas, Chief Executive Officer of NGM, commented: “The MOU with Riversgold is another important step in NGM’s journey to unlock the value of otherwise stranded low-grade nickel and cobalt laterite ores in the heart of one of the best nickel regions in the world. With highly promising additional tenements secured, as well as the backing of a key investor ahead of our ASX listing, NGM is well placed to capitalise on the rapidly growing battery metals markets with an exciting venture utilising patent-protected, sustainable processing technology at its core. I look forward to formally welcoming Riversgold as a major shareholder in due course.”
Julian Ford, Chief Executive Officer of Riversgold, added: “We are delighted to have entered into this partnership with NGM, which enables Riversgold to create further value for its shareholders through an exciting new nickel-cobalt project. The quality of NGM’s assets, combined with their exclusive access to ground-breaking processing techniques, make for a compelling investment opportunity and we are pleased to be a part of spearheading the ethical, sustainable supply of these highly sought- after battery metals.”
