GWR Group Sells Majority Stake in Hatches Creek Tungsten Project to Focus on Magnesium
GWR GROUP LIMITED (GWR) Share Update August 2024 Monday 5th
GWR Group Sells Majority Stake in Hatches Creek Tungsten Project
GWR Group Limited (ASX: GWR) has announced the sale of its remaining 80% interest in the Hatches Creek Tungsten Project to its joint venture partner, Tungsten Mining NL (TGN). This move allows GWR to concentrate on its Prospect Ridge Magnesium Project and other investment opportunities.
Instant Summary:
- GWR Group sells its 80% interest in the Hatches Creek Tungsten Project to Tungsten Mining NL.
- GWR will receive 107.5 million fully paid ordinary shares in TGN at $0.08 per share.
- GWR's voting power in TGN will increase to approximately 19.86%.
- Completion of the agreement is subject to Ministerial consent under the Mineral Titles Act 2010 (NT).
Background to the Agreement
GWR Group Limited, through its subsidiary NT Tungsten Pty Ltd, had previously sold a 20% interest in the Hatches Creek Project to Territory Tungsten Pty Ltd, a subsidiary of TGN, in 2019. The recent agreement accelerates the sale of the remaining 80% interest, aligning with GWR's strategic focus on other commodities.
Details of the Agreement
Under the terms of the agreement, GWR will sell its 80% interest in the Hatches Creek Project, including tenements, mining information, and contracts, to TTPL. In return, GWR will receive 107.5 million fully paid ordinary shares in TGN at a deemed issue price of $0.08 per share, increasing GWR's voting power in TGN to approximately 19.86%.
The agreement is conditional upon obtaining Ministerial consent under the Mineral Titles Act 2010 (NT) for the transfer of all rights and obligations related to the tenements. The parties do not anticipate requiring any shareholder approvals, subject to confirmation by the ASX.
Strategic Focus and Future Plans
With the sale of the Hatches Creek Project, GWR will focus on its Prospect Ridge Magnesium Project and continue to seek new investment opportunities. The company aims to rationalize its project portfolio and direct resources towards its strategic commodity focus. GWR shareholders will retain economic exposure to the Hatches Creek Project through the company's shareholding in TGN.
GWR will update shareholders on any developments related to its Prospect Ridge Project and potential acquisitions in accordance with its continuous disclosure obligations.
The sale of the Hatches Creek Project allows GWR to concentrate on its core operations and strategic initiatives. The increase in GWR's voting power in TGN provides continued economic exposure to the tungsten project. Investors may view this as a positive step towards streamlining operations and focusing on high-potential projects.
Investor Reaction:
Analysts are likely to react positively to GWR's strategic move to focus on its magnesium project and other investment opportunities. The increase in voting power in TGN is also seen as a beneficial outcome for GWR shareholders, providing continued exposure to the tungsten market.
Conclusion:
Investors should monitor GWR's progress on its Prospect Ridge Magnesium Project and potential new acquisitions. The company's strategic focus and streamlined portfolio could lead to long-term growth and value for shareholders.