- 01DYM sells Lady Jane to FAU for $650k.
- 02DYM keeps 1.5% gross royalty.
- 03FAU to spend $250k on drilling; DYM may reacquire for $100k.
Dynamic Metals (ASX: DYM) has agreed to sell its 100%-owned Lady Jane gold project in Western Australia’s Ora Banda district to First Au (ASX: FAU) for $650,000 in cash and deferred consideration.
The transaction provides for $50,000 within five business days of execution, $100,000 at completion and a further $500,000 around the first anniversary of completion, with Dynamic able to choose cash or First Au shares for the deferred component.
Dynamic will retain a 1.5% gross revenue royalty over all minerals extracted and sold from Lady Jane, preserving exposure to future exploration and development success after the sale.
First Au has also committed to spend at least $250,000 directly on drilling at the project within 24 months of completion, allowing exploration to continue without further funding from Dynamic.
Completion remains subject to customary conditions, including necessary approvals and consents and any required documentation relating to existing third-party agreements, which must be satisfied or waived within 90 days of execution unless the parties agree otherwise.
Cash and Deferred Consideration
Lady Jane comprises six granted exploration licences, with Dynamic agreeing to transfer its full interest in the licences together with the associated mining information.
If Dynamic elects to receive the $500,000 deferred consideration in First Au shares, the number of shares will be determined using the 20-day volume weighted average price up to but excluding the first anniversary of completion.
Any share issue will be subject to necessary shareholder approvals, with the deferred consideration instead payable in cash if the required approval is not obtained.
“The sale of Lady Jane provides an opportunity for Dynamic to realise value from a non-core part of our portfolio while retaining exposure to future success through the royalty,” managing director Karen Wellman said.
“The transaction further demonstrates our strategy of actively managing the portfolio and directing our capital towards the opportunities where we believe it can have the greatest impact.”
Minimum Drilling Commitment
First Au’s minimum drilling commitment requires at least $250,000 of direct drilling expenditure within 24 months after completion, focusing the required spending on drilling and directly associated activities.
Qualifying expenditure specifically excludes geophysics, surface geochemistry, desktop studies, corporate and administrative overheads, and general management costs, keeping the commitment directed towards drilling work at Lady Jane.
If First Au does not meet the minimum drilling commitment within the prescribed period, Dynamic can elect to re-acquire the project and associated mining information for $100,000, subject to the transaction terms.
The structure aligns with Dynamic’s stated strategy of realising value from non-core assets while retaining exposure to future exploration success and directing its capital towards other opportunities in its portfolio.
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