Forge chairman eyes hefty payday
JUNIOR mining explorer Forge Resources has announced a mineral sands acquisition that will move its non-executive chairman, Nicholas Curtis, closer to securing a lucrative parcel of shares in the company.
JUNIOR mining explorer Forge Resources has announced a mineral sands acquisition that will move its non-executive chairman, Nicholas Curtis, closer to securing a lucrative parcel of shares in the company.In a deal sourced by the mining entrepreneur, Forge has signed an option agreement to acquire the Eucla West mineral sands project in the remote Eucla Basin of Western Australia in a deal potentially worth more than $10 million.Mr Curtis, who is also the managing director of rare earths miner Lynas Corporation, was granted 24 million performance shares in Forge a year ago to help attract high-quality resource projects to the company. At current prices the shares would be worth more than $13 million.The performance shares expire in six months, and will only convert to ordinary shares if a project he brings in leads to a $15 million capital raising, at no less than 35? a share.His first proposed deal involved a controversial related-party transaction to sell the Lynas-owned Crown polymetallic deposit in WA to Forge.The deal was abandoned in April after conflict-of-interest concerns were raised by several Lynas shareholders and strong concern from institutional shareholders who felt the deal was a distraction from the company's pressing demands at its Malaysian operations.Forge yesterday also announced a placement of 5 million shares to prominent resources investor Conglin Yue for $2.5 million, or 50? a share. Subject to shareholder approval, this will grant Mr Yue about a 19 per cent stake in the company, with 21.6 million Forge shares currently on issue.Proving up a Joint Ore Reserves Committee compliant resource can be a long process, but mineral sands projects can be done within six months due to the relative proximity of the resource to the surface."The problem with Eucla Basin in general is it's extremely remote and it has to be a decent size to be viable," one analyst said.David Hall, a director of Diatreme, which owns the Cyclone deposit in the Eucla Basin, agreed the proving up could be done in six months but warned the mineralogy of the basin was relatively untested. The ASX-listed Arturus Capital previously held an option to buy the Eucla West project, but it expired last month.
Share this article and show your support