The company has entered an agreement with Canadian-based Vox Royalty Corp with the proposed transaction valued at A$750,000.
() is selling its non-core gold royalty on select tenements within the advanced exploration stage Bulong Gold Project for total consideration of A$750,000.
The company has entered into a binding Royalty Sale and Purchase Agreement with Vox Royalty Corp (CVE:VOX) to sell this gold royalty.
Bulong, which is owned and operated by (), is 25 kilometres east of Kalgoorlie in Western Australia.
A “sensible approach”
RPM chairman Grant Carman said: “Not only is this the sensible approach but in light of our acquisition and growth strategy in the automotive space and more specifically in our tyres and wheels division, the liquidation of non-core assets is the prudent course of business.”
The A$750,000 consideration comprises A$400,000 in cash and A$350,000 in Vox Royalty Corp shares.
The royalty was created when RPM, formerly Kairiki Energy Limited, farmed out its mineral tenements in 2009.
It is one of the assets that were taken over from Kairiki and the RPM board made the decision to dispose of this asset on the basis that it is no longer a mining company and has received a fair market price for the asset.
Upside from Vox investment
Carman said: “We are interested to see what transpires with our investment in Vox Royalty Corp. Vox completed its brokered private placement in May 2020 at C$3.00 and at the time of drafting this release, the share price was C$3.49.”
Vox executive vice-president Riaan Esterhuizen said: “Vox is excited to add this advanced exploration-stage gold royalty with near-term development potential and considerable exploration upside to our growing portfolio.”
Rapid progress at Bulong
He said: “Black Cat has a strong management team with a track record of transitioning projects from exploration to mining and has made rapid progress at Bulong through a substantial amount of drilling and completion of various technical studies.
“This acquisition is consistent with our strategy of acquiring high-quality royalties in Tier-1 jurisdictions such as Australia from unconventional sellers who are motivated to realise value for their shareholders by monetising non-core assets.”
RPM Automotive Group is a leading player in the Australian Automotive Aftermarket comprising a number of businesses involved in importing, wholesaling and retailing of tyres, mechanical repairs, motorsport apparel and safety equipment, niche manufacturing and a roadside assistance service for the transport industry.
The company owns brands, such as RPM Racewear, Carline, Genie, Air Anywhere and Formula Off-Road.