Osmond To Acquire Major European Rutile, Zircon And Rare Earth Project

Osmond Resources Limited (ASX: OSM) (Osmond or the Company) is pleased to announce it has executed an agreement to acquire up to an 80% interest in the capital of Iberian Critical Minerals Pty Ltd (ICM) via a three-tranche staged acquisition.  ICM currently holds a 100% interest in the capital of Omnis Mineria SL (Omnis) which in turn holds a 51% interest in the capital of Green Mineral Resources SL (GMR). Omnis has the right to increase its interest in GMR to at least 90% upon completion of a JORC Code compliant Scoping Study.  GMR holds a 100% interest in the rights and title to the Orion EU Critical Minerals Project.

 

Orion EU Critical Minerals Project

Overview

The Orion EU Critical Minerals Project (the Project) is located in Jaén Province, Andalucía, Southern Spain (refer Figure 1 below).  The Project includes 288 Spanish mining units (cuadrículas mineras) covering an area of 86.4km².

Figure 1 – Map showing Orion EU Critical Minerals Project location

 

It is a siliciclastic geological system with various layers rich in critical minerals including rutile (titanium), zircon, hafnium, and light and heavy rare earths.  The Project area was explored for thorium and uranium in the 1950s and 1960s and includes a historic galena mine (refer Figure 2 below).  Three initial target areas have been identified with a focus on the Avellanar target (refer Figure 3 below) that includes the exploration results referred to below.  The “Admisión Definitiva” (main pre-cursor to permit award) was published in the “Boletín Oficial de la Provincia de Jaén” (Province Bulletin) in March 2024 with formal permit award expected in Q4, CY24.

 

Exploration activities to date have focused on outcrops of mineralisation across a wide area of the Avellanar target.  Figure 4 below highlights some outcrops used for channel sampling and the existing geological interpretation of a mineralised sequence expected to be uninterrupted across the target area.

 

Figure 2 – Photos on location at Avellanar Zone showing remnants of historic galena mine in the permit area

 

Figure 3 – Map showing three Target Areas within the Permit Boundary

 

Figure 4 – Photo showing selected outcrops and geological interpretation of potential mineralised sequence

 

Exploration Results

Green Mineral Resources SL has completed two rounds of modern exploration activities in the Avellanar Zone (refer to Figure 3 above):

1. Sixteen channel samples from outcrops across more than 4kms; and
2. Three bulk samples from three outcrops weighing 150kgs in total.

 

Figures 4 and 5 show the locations of the channel samples and bulk samples within the Avellanar Zone.

 

Figure 5 – Map showing Channel Sample and Bulk Sample locations within Avellanar Zone

 

The channel sampling was designed to test relevant element and oxide grades in the outcrops.  Samples of approximately one to three kgs were collected, prepared and sent to ALS Labs in Seville, Spain for crushing and splitting prior to being shipped to ALS Labs in Galway, Ireland for geochemical assessment.   Select results are shown below.  A full summary of results is shown in Appendix 1.

 

Table 1 – Select Assay Results from 16 Channel Sample Program

The bulk sampling across three different outcrops was designed to confirm channel sample grades, determine mineral species and to consider initial processing routes with respect to grinding size and liberation.  150kgs of material was taken from three different outcrops.  Samples were collected, bagged in plastic and sent to SGS Labs in Huelva, Spain for crushing, pulverising and splitting before being shipped to SGS Labs in Toronto, Canada for geochemical and technical assessment.  Select results from the three samples are shown below and a full summary of results is shown in Appendix 2.

 

Table 2 – Select Modals and Oxide Results from 150kg Bulk Sample Program

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 6 – Graphs showing % of Modals Condensed (% of Heavy Metals) 

 

Figure 7 – Graph showing Sample 3 Cumulative Passing of Mineral Mass at Grain Size 

 

With respect to initial process test works relating to grinding size and liberation, the chart below in Figure 7 presents encouraging early results suggesting a relatively clean mineral assemblage and a reasonable possibility of a low cost gravity circuit processing route.

 

EU Initiatives to Support Critical Minerals’ Projects

On 23 May 2024, the European Critical Raw Materials Act came into force.  The legislation is designed to enhance the EU’s capabilities in sourcing, processing and recycling critical raw materials.  The EU has identified 34 critical minerals.  It has also identified a subset of 17 critical minerals referred to as “strategic” raw materials.  This list includes titanium, and light and heavy rare earths.

 

Under the Act, the EU is targeting at least 10% of its annual consumption for internal EU extraction and at least 40% of its annual consumption for internal EU processing.  Selected strategic projects that include strategic raw materials are legislated to benefit from support for access to finance and shorter permitting timeframes (a maximum of 27 months for extraction projects).

 

The EU currently extracts no titanium, no light or heavy rare earths and less than 20% of its annual consumption of zircon.

 

In addition to the above, the Spanish Government has grant schemes for critical minerals projects, the European Investment Bank has project finance support initiatives and European Development Bank has grant schemes.

 

Next Steps

Upon final permit award, the Company intends to quickly commence a modest drilling program with respect to confirming continuity of the mineralisation between outcrops.  Assuming success, the Company will seek to fast-track development activities initially focused on a Mineral Resource Estimate to support a Scoping Study.  Importantly, metallurgical testworks are advanced given the 150kg bulk sample and relatively homogenous nature of the material across the three outcrops.

 

Acquisition Terms

Iberian Critical Minerals

Osmond has negotiated a three-tranche staged acquisition of Iberian Critical Minerals Pty Ltd (ICM).  ICM currently holds a 100% interest in the capital of Omnis Mineria SL (Omnis) which in turn holds a 51% interest in the capital of Green Mineral Resources SL (GMR).

 

Omnis has the right to earn-in up to a 90% interest in the capital of Green Mineral Resources SL (GMR).  GMR holds a 100% interest in the rights and title to the Orion EU Critical Minerals Project (Project).  

 

Omnis may increase its interest in the capital of GMR from 51% to 90% upon completion of a Scoping Study.  Once Omnis holds a 90% interest in the capital of GMR, the holders of the remaining 10% of GMR have the choice to be diluted through the issue of further equity for funding required to progress the Project or to convert their 10% interest into a royalty.  

 

The 2.5% net smelter return royalty commences once 1.2m tonnes of concentrate has been sold from the Project. GMR has the right to buy back the royalty by paying the owners US$1.5m.

 

Osmond’s acquisition of ICM is split into three stages consistent with the table below:

 

In addition to the above, Osmond has agreed to reimburse the vendors A$200k representing the recovery of expenses incurred to date in progressing the Project.  This cash payment is to be paid to the vendors upon the exercise of the Stage 1 interest.

 

Iberian Alumina

Post the receipt of encouraging assay results from the five drill hole confirmatory drilling program, the Company is pleased to confirm its intention to acquire the Iberian One Project.  The Iberian One Project is 100% owned by Iberian Alunite SL (IA) that is in turn 100% owned by Iberian Alumina Pty Ltd.  The acquisition has been renegotiated to a single share payment for a 100% interest and a 1% gross revenue royalty.

 

The 5m options have a 30c strike price and an expiry date of 30 November 2027.

 

Proposed Corporate Structure

The proposed corporate structure is shown below.

Note – Iberian Critical Minerals Pty Ltd holds a 100% interest in the capital of Omnis Mineria SL (Omnis). Omnis holds a 51% interest in the capital of Green Mineral Resources SL (GMR).  Omnis, via an earn-in agreement with GMR, has the right to increase its interest in GMR from 51% to 90% by completing a Scoping Study.

 

Figure 8 – Proposed Spanish Project corporate structure post completion of Iberian Alumina acquisition and Stage 1 of Iberian Critical Minerals acquisition

 

Corporate Initiatives to Support Acquisition

Placement

The Company has binding commitments to complete a non-brokered 10m share placement on the following terms:

• 10m new ordinary shares at 7c per share representing a 0% discount to the Company’s last traded price on 2/09/2024;
• Shares to be issued under Company’s 15% capacity under ASX Listing Rule 7.1 (3,663,729 shares) and 10% capacity under ASX Listing Rule 7.1A (6,336,271 shares); and
• Expected settlement of placement shares on Friday 6 September 2024.

 

The purpose of the raising is to fast-track metallurgical testing and to undertake initial drilling.  The only costs of the offer relate to ASX listing costs for the new 10m ordinary shares.

 

New Managing Director Appointment

The Company is pleased to announce the appointment of Mr Anthony Hall as Managing Director effective Monday 9 September 2024.  Mr Hall will replace the Company’s founding Executive Director, Mr Andrew Shearer.  Mr Hall is well placed to progress the Company’s next phase of activities having lived in Spain while acting as Managing Director and CEO of ASX listed potash developer, Highfield Resources Limited (ASX.HFR).  Mr Hall has been founding Managing Director and CEO of two ASX listed companies that successfully transitioned from IPO to inclusion in the ASX300.

 

On behalf of all shareholders, the Directors would like to express their gratitude to Mr Shearer for his services to the Company.  Mr Shearer was the founding Executive Director being directly responsible for the successful IPO, project progression and the agreement to acquire the two new projects.  Mr Shearer will continue providing services to the Company through to 30 November 2024 and then will be available on an ad hoc basis.

 

Mr Hall’s key employment terms are described in Appendix 3.  

 

Strategic Advisor Appointment

In addition to the new Managing Director appointment, the Company has appointed Mr Tolga Kumova as Strategic Advisor.  Mr Kumova has extensive global experience in industrial minerals.  He is a resource industry entrepreneur and corporate finance specialist with broad experience from financing early-stage explorers through to managing ASX listed companies and raising hundreds of millions of dollars to finance mining activities.

 

Director and Management Options

It is proposed to issue the following options to the Directors, Mr Anthony Hall and senior management. The options will be unlisted with an exercise price of $0.15 and an expiry date 4 years from the issue date.

 

Anthony Hall                                 8,000,000*

Andrew Shearer                              500,000

Rhod Grivas                                  1,000,000

Daniel Eddington                          1,000,000

Adrien Wing                                  1,000,000

In country manager                       1,000,000

Total                                             12,500,000

*4,000,000 subject to share price vesting condition, refer to Appendix 3 for terms

 

The options to all Directors and Mr Anthony Hall will be subject to shareholder approval.  Options to management and consultants will be issued from the Company’s current ESOP.

 

In addition, the Company will also seek shareholder approval to issue 7.5M unlisted options on the same terms to non-related advisors and consultants that will vest immediately and 5M options to non-related advisors and consultants that will vest if shares trade at over 50c for a continuous period of 20 trading days.  Further details will be provided in the relevant Notice of General Meeting.

 

Annual General Meeting

The Directors of Osmond expect to convene the Annual General Meeting of the members of the Company in late October 2024 or early November 2024.  At this meeting, it is expected that the members will vote on the acquisition of the two projects as described above.

 

-Ends-

Link to ASX Release: Osmond To Acquire Major European Rutile, Zircon And Rare Earth Project

 

To learn more about Osmond Resources, visit: osmondresources.com.au/

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Elvis Jurcevic

Investor Relations

+61 408 268 271