Boss has entered into an agreement to acquire 100% of the issued share capital of Uranium One Australia which owns the Honeymoon Uranium Project (“Acquisition”). The consideration for the Acquisition includes:
- A $200,000 site access fee (paid) which gave Boss the exclusive right to access the Honeymoon Uranium Project and conduct all its due diligence
- An initial cash payment of approximately $2,442,000 (comprising an amount of $2,115,000 plus a care and maintenance contribution of approximately $327,000) (“Closing Amount”)
- $3 million under a promissory note and repayable within 24 months of completion of the Acquisition
- $4 million under a promissory note issued and repayable within 48 months of completion of the Acquisition
Boss will also make the following contingent payments to U1 upon successful recommissioning of the Honeymoon Uranium Project:
- $2 million payable in cash and/or shares upon the later of restart of the operations with commercial production or 5 years of completion of the Acquisition
- 10% of the net operating cash flow of the Honeymoon Project payable annually up to a maximum of $3 million
The payment of the Closing Amount has been guaranteed by Carbine Resources Limited (“Carbine Guarantee”). In consideration for the Carbine Guarantee, Boss issued 10 million unlisted options exercisable at $0.02 each within 3 years from date of issue. The promissory notes are secured under the terms of a general security deed. Repayment of the amounts due under the promissory notes may be accelerated in certain circumstances, including where Boss raises financing of $15 million, the sale of the shares in Uranium One Australia or the Honeymoon Project (or part thereof) or a change in control of Boss.
Conditions to the Acquisition
Completion of the Acquisition is subject to various conditions precedent, including but not limited to:
- No insolvency event occurring with respect to Boss, its subsidiaries or Carbine Resources Limited;
- any requisite shareholder approval of Boss;
- U1 and Uranium One Australia obtaining any necessary approvals from contractors;
- U1 and Uranium One Australia discharging existing security interests in respect of the shares in Uranium One Australia and the Honeymoon Project; and
- That a material adverse change in the business or assets of Uranium One Australia does not occur prior to the completion date.
It is anticipated that completion shall occur within approximately three months.
Option over Wattle’s 20% in Joint Venture
Boss has a call option to acquire Wattle’s 20% interest in the Joint Venture after it completes a positive bankable feasibility study to restart the operations. The terms of the acquisition will be mutually agreed or otherwise determined by an independent valuer taking into account the valuation of the project and market capitalisation of Boss at the relevant point in time. The consideration of the acquisition of Wattle’s 20% interest may, at the election of Boss, be payable in cash and/or shares in Boss.