Multi-commodity explorer Oar Resources has bolstered its coffers with a solid $500,000 injection following the sale of its ‘non-core’ Bramfield iron ore project in South Australia. The company plans to utilise the extra cash to focus on exploration efforts of its Crown nickel-copper-PGE project in the Julimar district in Western Australia where Chalice Mining recently made headlines with its behemoth nickel-copper-PGE deposit.
The new owner is Vietnam based, Hoa Phat Group via its subsidiary Dragon Resource Investment. The company is Vietnam’s largest steel producer and a leading industrial manufacturing group.
The sale of the Bramfield iron ore project makes up part of an ongoing strategic review by Oar to rationalise its portfolio and where possible generate cash from non-core assets that can then be targeted towards priority assets.
Bramfield was previously written down to a nil valuation, so the $500,000 cash consideration represents a significant increase to the balance sheet. A $100,000 deposit has been paid already with the remaining money to be transferred on settlement date pending satisfaction of the agreed conditions.
The project is located on the Eyre Peninsula in South Australia and is held by Oar’s wholly owned subsidiary Lymex Investments. The project was one of the venture’s original assets and has been considered a non-core asset for a considerable amount of time. Management’s recent focus has instead been on its Crown project in Julimar, the Gibraltar halloysite-kaolin project in South Australia and the Douglas Canyon gold project in Nevada, USA.
Oar is currently in a series of other discussions with potential buyers on its other assets in South Australia with a large landholding considered prospective for kaolinite, halloysite, graphite, iron ore and other commodities.
With the Bramfield sale now signed, Oar will focus on its Crown project that lies a mere 8km away from Chalice Mining’s famous Gonneville nickel, copper and PGE deposit that has been the talk of the town since releasing a cracking set of numbers from its maiden resource estimate late last year.
The figures for Gonneville checked in at a whopping 330 million tonnes grading 0.58 per cent nickel equivalent and 1.6 g/t palladium equivalent.
Oar Resources Chief Executive Officer and Managing Director, Justin Richard said:
“Anyone who knows mineral exploration, knows the early stages in a project’s lifecycle present high- risk, high-reward opportunities. OAR is in a favourable position compared to many of its peers, having a diverse project portfolio that includes several promising projects with potential to become standalone mining companies in their own right.”
“In the case of the Bramfield Iron Ore Project, it was not adding value and has not been a priority for the Company at any stage. The Company's other projects offer better opportunities to increase shareholder returns and this sale realises where there was previously none.”
With a heavier wallet from its sale of the underperforming Bramfield iron ore asset, Oar can now focus its attention on the company’s solid gold asset located within a multi-million ounce gold producing area of Nevada in addition to its prime real estate on Chalice’s Gonneville discovery front yard. Being able to raise cash without going to the market and diluting the value of existing shares should also bring a smile to the face of existing shareholders.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
