A$31m Transaction with Murray Zircon and Guangdong Orient Zirconic
In June 2016, Image Resource NL (“Image”) completed a transformational transaction with Murray Zircon Pty Ltd (“Murray Zircon”) and Murray Zircon’s major shareholder, Shenzhen Stock Exchange listed Guangdong Orient Zirconic Ind Sci & Tech Co., Ltd (“Orient Zirconic”), to facilitate the development of Image’s flagship Boonanarring mineral sands project, located in the Perth Basin.
The transaction was comprised of the following key elements:
- Acquisition by Image of a wet plant and associated assets from Murray Zircon, in exchange for 42% of Image’s expanded share capital being issued to Murray Zircon (valued at A$17m). A further 5% of Image will issued to Murray Zircon if a decision to mine is reached and project finance secured within 2 years of completion
- A$4m working capital loan from Murray Zircon to Image, to facilitate development activities at Boonanarring
- A zircon products offtake agreement between Image and Orient Zirconic for 90% of all zircon products produced by Image at market prices
- US$8m prepayment facility provided by Orient Zirconic to Image, drawable following first production from Boonanarring, and
- A call option in favour of Image to purchase a dry mineral separation plant from Murray Zircon, located at its South Australian Mindarie project
Azure advised Image on all aspects of the transaction, including assessment and valuation, transaction structuring, due diligence, negotiation of commercial terms, and the process through to completion (including securing relevant approvals).