- Mining company Calidus Resources (CAI) has revised terms for its acquisition of the Blue Spec gold-antimony project from Novo Resources
- The companies first announced the $19.5 million cash deal for the Pilbara-based project on September 21
- Calidus has since requested an extension on its acquisition payment, which was originally due on November 30
- The extension will allow the company to focus on completing a funding package for the nearby Warrawoona gold project
- Calidus Resources closed 1.9 per cent in the red for 51.5 cents per share
Calidus Resources (CAI) has revised terms for its acquisition of the Blue Spec gold-antimony project from Novo Resources.
Novo is a Canadian-based mining company that is listed on the TSX Venture Exchange (TSXV). Canadian miner previously acquired the Blue Spec project in August 2015, but found that it was not compatible with another property, the Nullagine mill.
In September of this year, the two companies agreed that Calidus would buy a portion of the Blue Spec project for $19.5 million cash. The acquisition made sense, as the Blue Spec project is located just 70 kilometres away from Calidus’ Warrawoona Gold project in Western Australia’s Pilbara region.
Under the deal’s original terms, Calidus was meant to pay the entire $19.5 million in consideration by November 30, 2020. However, the company has since requested an extension on its payment schedule, which Novo has agreed to.
Under the new revised payment schedule, Calidus will make an initial payment of $2.5 million by November 30. This will allow the company to secure a ten per cent interest in Blue Spec.
If Calidus pays another $2.5 million by January 31, 2021, the company may increase its ownership in the project to 20 per cent. Otherwise, it may make a payment of $5 million by January 31, 2021, to increase its interest to 25 per cent.
For the third and final payment, Calidus has two options, depending on the choices it made for its second payment. If the company chose the 20 per cent interest option, it must pay $14.3 million in cash by March 31, 2021 to acquire all remaining interest.
If, however, Calidus chose the 25 per cent interest option, the company must pay $11.8 million by March 31, 2021 to acquire all remaining interest. In this case, the $11.8 million may be comprised entirely of cash, or can be paid as $10.3 million cash and $1.5 million in Calidus shares.
Calidus’ Managing Director, Dave Reeves, commented on the benefits of the extension agreed to by Novo Resources.
“The revised schedule allows Calidus to focus on finalising the funding package for Warrawoona, where early works construction has commenced,” he said.
“We believe Blue Spec is a highly value-accretive acquisition for Calidus, considering the infrastructure and skills sets available at Warrawoona, and we would like to thank Novo for their agreement on the revised payment schedule,” he added.
Calidus Resources closed 1.9 per cent in the red for 51.5 cents per share.