As commented b4, not keen on the one man band management but he scores deals that benefit him.
If this one is worth 110m RXL shares of which shareholders get an in species distribution of 55m RXL.
Then if “nominal value” of an RXL share is 25c and current float of fpos for VMC is only about 178m.
Then isn’t that worth 7.7c per VMC share?
55m RXL ÷ 178m VMC = 0.31 RXL shares
O.31 x 0.25 = 0.077?
Of course it’s not for nothing – VMC loses it’s partial ownership of the Youanmi Gold Project tenement except through its shareholding in RXL.
Held – still at a paper loss
Excerpt from Stockhead today:
VMC’s main game was the advanced Youanmi gold JV with Rox Resources (ASX:RXL), but this asset is now set to be consolidated into RXL to simplify the ownership structure ahead of development.
This means a solid payday for VMC shareholders.
RXL will shell out 110m shares to VMC for its part in the JV – worth ~$30.8m, equivalent to VMC’s entire market cap — with 55m of those to be distributed to shareholders.
The remaining 55m shares with be retained by VMC, which will own 18% of RXL once the deal completes.
There’s also potential for these shares to be worth a lot more as a development decision approaches, with VMC noting that RXL “currently trades at a resource multiple that is a substantial discount to its peers”.
Managing director Matt Hogan, a veteran dealmaker who once sold an iron ore company to BHP for $204m, will be appointed to the RXL board as non-exec director.
The deal also includes all VMC’s gold interests in its other joint ventures covering other regional areas, but it will retain a bunch of other projects prospective for lithium, vanadium, base metals, and rare earths.
In 2019 RXL farmed into Youanmi, a historic mine which produced ~667,000oz of gold (at 5.47g/t) during three main periods: 1908 to 1921, 1937 to 1942, and 1987 to 1997.
When the mine closed in the 1997, gold was selling for just $AUD400/oz. Even so, it was still profitable.
After many kilometres of drilling RXL has now defined a substantial, high grade 3.02Moz open pit and underground resource.
A recently published Scoping Study – the first proper look at the economics of (re)building a project — contemplated a 71,000oz per annum operation.
Over an initial eight-year mine life it would produce 569koz of gold at an all-in sustaining cost of $1,546/ounce.
The pre-tax NPV came in at just over $300 million with an internal rate of return of 45% assuming a gold price of $2,450/oz.
A pre-feasibility study is underway.
