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- Stone Resources Australia (SHK) has seen its share price soar, after it announced it would sell its Ben Hur project
- The Ben Hur project will be sold to Regis Resources for $10 million worth of shares, plus royalties
- Stone said the sale will allow it to pay $6 million to Stone HK as part of a debt agreement signed in March 2020
- Today’s announcement also coincides with the company coming out of voluntary suspension, after weeks of being suspended
- Shares in the company have soared 225 per cent since being reinstated and closed trading for 1.2 cents per share
Gold development company Stone Resources Australia (SHK) has seen its share price rise by 225 per cent, after it announced it would sell its Ben Hur project.
The sale also marks the company’s return to official quotation, after being voluntarily suspended from trading since late July.
The sale
Stone Resources will sell its Ben Hur project to Regis Resources for $10 million worth of Regis shares and a one per cent net smelter return (NSR) royalty in the project.
The Regis shares will be priced on the five-day volume weighted average price of the company’s current share price.
The one per cent NSR will only kick in after the first 100,000 ounces have been produced at Ben Hur. Further, the royalty is capped at $5 million.
From there the one per cent NSR will reduce to a 0.0025 per cent rate for another four years.
Debt agreement
Once the sale is complete, Stone Resources plans to use $6 million of the $10 million for its existing debt agreement.
SHK signed a Debt and Equity Agreement with major shareholder Stone HK in March this year in order to recapitalise the business.
Along with handing over $6 million in Regis shares (which it plans to sell to the marketplace), Stone Resources also plans to transfer its NSR to Stone HK.
There are a number of other considerations as part of the deal, but SHK said once it’s complete it will allow the company to “strengthen its balance sheet”.
It will also allow the company to further “focus on its Brightstar Gold Project, at a time of record high gold prices.”
Reinstation
Today’s sale also marks Stone Resources return to trading, after being voluntarily suspended from official quotation since late July.
Shares in the company soared after being reinstated, up 225 per cent at one point during trade today, August 12.
SHK’s shares closed trading 200 per cent in the green, trading for 1.2 cents each.
