- Korab Resources (KOR) spikes on the ASX after scrapping the potential sales of its Northern Territory magnesium and phosphate assets
- The company says after an internal review of potential sales deals for its Rum Jungle assets in the Northern Territory, it has made the call take the assets off the bidding table
- This means Korab will keep control of its Winchester magnesium and Geolsec phosphate assets
- The company says it will continue to engage in discussions for potential offtake deals, joint ventures, and financing for the projects
- Shares in Korab Resources are up 16.33 per cent and trading at 5.7 cents each at 3:10 pm AEDT
Junior explorer Korab Resources (KOR) has spiked on the ASX today after scrapping the potential sales of its Northern Territory magnesium and phosphate assets.
The company previously told shareholders it had received interest from potential buyers for its Rum Jungle mineral assets, which include the Winchester magnesium and the Geolsec phosphate projects in the Northern Territory.
However, Korab said today following an internal review of the potential transactions, it had decided that selling the assets would not be in the best interests of the company and its shareholders.
“All discussions regarding the potential sale of Winchester or Geolsec will be terminated,” Korab said in a statement to the ASX today.
“However, the company will continue to engage in discussions regarding potential offtakes, joint ventures, and provision of financing.”
It seems Korab’s call to take its Northern Territory assets off the bidding table comes in light of an expected upcoming rise in demand for magnesium and phosphorous.
The company said production and export cuts by China, which are likely to continue into the foreseeable future, are driving demand for materials like magnesium, phosphate and rare earth elements (REE).
This is evidenced by growing support for these markets from investors as well as major financing boosts from government and private sources.
Specifically, Korab flagged the $2 billion Critical Minerals Facility (CMF) established by the Australian Government as a potential source of funding for projects like Winchester and Geolsec, as well as the $5 billion North Australian Infrastructure Fund (NAIF) designed to make funding for North Australian projects easier to access.
On top of this, Korab said it had been approached by users of magnesium metals and alloys, REE, and phosphorous to potentially secure long-term supply of these resources.
Korab stopped short of naming any of its potential suitors.
Nevertheless, the company said it would now look to evaluate various magnesium production methods as it prepared its mine management plan for its Winchester project.
Shares in Korab Resources were up 16.33 per cent and trading at 5.7 cents each at 3:10 pm AEDT. The company has a $22 million market cap.