Xenora Minerals Limited (ASX:XRA) has entered into a binding agreement to acquire 100% of Errolls Exploration Pty Ltd from Breakthrough Minerals Limited (ASX:BTM), with the transaction valued at $1.2 million through the issue of 6 million XRA fully paid ordinary shares at a deemed issue price of $0.20 per share.

Key Points

  • XRA will acquire 100% of Errolls Exploration Pty Ltd, which holds the Errolls Gold Project in Western Australia's Murchison region, for 6 million XRA shares at $0.20 per share, representing a deemed transaction value of $1.2 million.
  • The consideration shares will be subject to a 12-month voluntary escrow from the date of issue, applicable whether retained by BTM or distributed to its shareholders.
  • BTM intends, subject to shareholder approval and regulatory requirements, to distribute the XRA consideration shares to eligible BTM shareholders via an in-specie distribution.
  • The Errolls Gold Project comprises Exploration Licence E57/996 and Mining Lease Application M57/653, located approximately 90km southeast of Meekatharra in the Barrambie Greenstone Belt.

Transaction Terms and Structure

Under the binding term sheet, BTM as seller will transfer all issued capital in Errolls Exploration Pty Ltd to XRA as buyer. The consideration consists of 6,000,000 XRA fully paid ordinary shares at a deemed issue price of $0.20 per share, equating to a deemed transaction value of $1.2 million. Completion is scheduled to occur five business days after satisfaction or waiver of the conditions precedent, or another date agreed by the parties. The 12-month voluntary escrow condition applies to the consideration shares regardless of whether they are retained by BTM or subsequently distributed to BTM shareholders.

Proposed In-Specie Distribution to BTM Shareholders

Subject to completion of the transaction, BTM shareholder approval, and final legal, tax and regulatory requirements, BTM intends to distribute the XRA consideration shares to eligible BTM shareholders by way of an in-specie distribution. No record date for the proposed distribution has been set. According to the filing, any record date, meeting timetable and distribution mechanics will be announced once the relevant transaction conditions, approvals and implementation steps are sufficiently advanced. Any consideration shares distributed to BTM shareholders will remain subject to the voluntary escrow restrictions for the balance of the escrow period.

Errolls Gold Project Details and Historical Drilling

The Errolls Gold Project is situated approximately 90km southeast of Meekatharra within Western Australia's Barrambie Greenstone Belt, adjacent to the Limestone Well Project that XRA is proposing to acquire from FireFly Metals Limited (ASX:FFM). The combined landholding is described in the filing as approximately 115km². The project has reported historical production of approximately 6,197oz of gold at an average grade of 19.01g/t Au. Historical RC drilling has returned intersections including 22m at 7.46g/t Au from surface, including 5m at 31.76g/t Au, and 11m at 6.88g/t Au from 14m, including 6m at 12.3g/t Au.