Free Ride Pacton knew the terms of Marindi deal for ELA 47/3555 with Bacome Ltd:
KEY DEAL TERMS
The option agreement is with Bacome Pty Ltd, a private prospecting syndicate associated with well-known geologist and mining identity Mr Joshua Pitt. The Company has paid Bacome $100,000 cash and issued 10 million Marindi shares to secure the option. Key terms of the deal are set out further in this release. Options Fee - $100,000 cash and 10m Marindi Shares for an exclusive 45-day option to acquire 100% of tenement number ELA 47/3555.
Marindi can exercise the option within 45 days by paying a further $400,000 in cash and issuing 80m Marindi shares.
Marindi is required to keep the tenements in good standing and spend a minimum of $350,000 per annum once the tenement is granted.
Bacome to retain a 5% Gross Overriding Royalty (GOR) on any future production from the tenement.
Pacton offered the following terms to Marindi:
Consideration to include an upfront payment of C$2m cash plus 10.098m Pacton shares
This will be equivalent to a 9.9% fully-diluted stake in Pacton (current market cap: ~C$70m)
Subsequent milestone payments totalling C$2m worth of Pacton shares 12 and 18 months will be payable after completion
The consideration will include an anti-dilution right on capital raises up to C$10 million, allowing Marindi to maintain its 9.9% interest at no cost to Marindi
IMO Pacton’s offer was very generous - 10% of Pacton. Pacton basically entered into negotiations with Bacome Ltd to reduce the 5% GOR to 1 or 2%. Looks like Bacome wouldn’t budge so Pacton withdrew its offer.
All Marindi has to do is spend $350,000 per year at ELA 47/3555 to keep its rights. Probably already done that this year. Marindi will try to wait out Novo’s delay in releasing information on the conglomerates hoping that the value of ELA 47/3555 will skyrocket when Novo indicate the grade/AISC and best mining method. This might allow Marindi to raise funds to start mining. Bacome is also getting a free ride but taking the risk that the 5% GOR will prevent any production from ever happening.
No wonder QH complained about other companies riding on Novo’s back for free and wants to limit information flow as much as possible while Pacton completes what deals it can. Wonder how long QH will keep things under wraps. My guess is well into next year.