Shares in Mark Creasy’s CZR Resources are poised to rocket after it shook hands with an iron ore-hungry Chinese businessman to sell an 85 per cent stake in its flagship project for $102 million.
CZR emerged from a pause in trade to inform the market on Thursday it had sold the stake in Robe Mesa to Perth-based Miracle Iron, which is owned by Frank Yin.
The deal comes just a week after Miracle inked a deal with Strike Resources to snap up the Paulsen’s East iron ore development for $20.5m.
The sale of CZR’s Robe Mesa comes amid a continuing buoyant market for iron ore. While the price of the steel-making ingredients has cooled in recent days on suspicions about China’s ability to provide enough stimulus to reinvigorate its lacklustre economy, it is still hovering above $US130 a tonne.
The all-cash offer represents a consideration of about 43¢ per CZR share — a 120 per cent premium to its 10-day volume-weighted average — with 80 per cent payable now and the remainder on either first shipment of iron ore from Robe Mesa or by June 30, 2025.
Miracle will also pay a $1m exclusivity fee and has committed to funding up to $3.9m in expenditure until the transaction is completed.
Managing director Stefan Murphy said the sale price reflected the value created at Robe Mesa and the overall potential of the project.
“The transaction will also remove CZR’s funding and development risks associated with the project while delivering CZR a very substantial cash balance,” Mr Murphy said.
“At the same time we will retain our Croydon gold project, along strike from De Grey Mining’s multi-million ounce Hemi gold discovery, and the Buddadoo vanadium-titanium project in WA.”
The one wrinkle in the deal will be Mr Creasy’s eligibility to vote on the proposal, given he is also locked in talks to sell his 15 per cent minority interest in Robe Mesa to Miracle Iron.
CZR said its initial approach to the Australian Securities Exchange indicated that Mr Creasy and his associated entities would likely be excluded.
More to come.