Buxton Resources Announces Equity Agreement with Contractors for Graphite Bull Project
BUX (BUX) Share Update August 2024 Sunday 11th
Buxton Resources Announces Equity Agreement with Contractors for Graphite Bull Project
Buxton Resources Ltd (ASX: BUX) has announced a significant development in its Graphite Bull project, involving equity agreements with key contractors.
Instant Summary:
- Buxton Resources initiates equity payment agreements with Topdrill Pty Ltd and Zanil Pty Ltd.
- Topdrill to conduct 5,000 meters of RC drilling at Graphite Bull and 500 meters at Narryer.
- Zanil Pty Ltd to provide earthmoving services for the Graphite Bull project.
- Up to 50% of Topdrill's invoice value to be paid in shares, subject to a six-month escrow period.
- Zanil Pty Ltd to receive up to $30,888 in shares, priced by 5-day VWAP.
- Drilling at Graphite Bull expected to conclude in early September, with Narryer to follow.
Equity Agreements with Contractors
Buxton Resources Ltd ('Buxton'; ASX: BUX) has entered into equity agreements with Topdrill Pty Ltd and Zanil Pty Ltd for ongoing works at the Graphite Bull project. This strategic move allows Buxton to conserve cash while aligning interests with its contractors.
Topdrill Pty Ltd is contracted to undertake both diamond and RC drilling at Graphite Bull and the Narryer Project. Currently, 5,000 meters of RC drilling is underway at Graphite Bull, with an additional 500 meters planned at Narryer. Zanil Pty Ltd is providing essential earthmoving services to support the drilling program.
Terms of the Agreement
Under the terms of the agreement with Topdrill, up to 50% of the total invoice value will be paid in fully paid ordinary shares, up to a maximum value of $1,000,000. These shares will be subject to a six-month voluntary escrow period from the date of each invoice.
Zanil Pty Ltd has agreed to accept up to $30,888 in shares instead of cash. The issue price for these shares will be determined by the 5-day volume weighted average price (VWAP) immediately preceding each invoice.
Project Timeline
The drilling program at Graphite Bull is expected to conclude in early September, with the Narryer program set to commence directly thereafter. Buxton Resources has confirmed that the issuance of shares will not require shareholder approval and will fall within the company’s 15% placement capacity under ASX LR 7.1.
CEO's Statement
Buxton’s CEO, Marty Moloney, stated, 'These equity for services arrangements promote a strong alignment of interests and are a vote of confidence from our service providers on the ground who can see first-hand the strong growth potential of Buxton’s 100% owned Graphite Bull project.'
The equity agreements with Topdrill and Zanil are likely to have a positive impact on Buxton Resources' financial position by conserving cash and aligning contractor interests with the company's success. This could enhance investor confidence in the project's viability and growth potential.
Investor Reaction:
Analysts may view this development positively as it demonstrates Buxton's ability to secure favorable terms with its contractors, reflecting confidence in the project's potential. However, the impact on stock price will depend on the successful completion of the drilling programs and subsequent project milestones.
Conclusion:
Investors should keep an eye on the progress of the Graphite Bull and Narryer projects, as successful outcomes could significantly enhance Buxton Resources' market position. The equity agreements with contractors are a strategic move to ensure the project's advancement while conserving cash resources.