Venus Metals’ Share Price sit 5.88% lower on Settlement

Today, Venus Metals Corporation Ltd [ASX:VMC] entered a binding term to assist the settlement of the Youanmi Gold Mine purchase with Rox Resources Ltd [ASX:RXL].

In what is being described as a ‘transformational deal’ that will unlock potential of the Gold mine. Rox is funding three joint ventures with VMC in forward exploration of the project area.

At time of writing, Venus Metals’ share price is trading 16 cents. Earlier in trading, shares of Venus moved as high as 19 cents, before they quickly settled back down.

Related: Three reasons why you should add gold to your portfolio in 2019.

Venus Metals joins forces with Rox

In order to purchase Youanmi, Venus first had to enter two option agreements.

VMC first announced its option-to-purchase transaction for the Youanmi Gold Mine on 28 May 2018, the current option stating that the total consideration payable by Venus is $5.45 million.

The Youanmi is located in Western Australia, 480km to the northeast of Perth.

Venus Metals is set to issue $3 million of its securities as well as a cash payment of $1,800,000 to the vendor of Oz Youanmi Gold.

In the new Youanmi Gold mine Joint Venture (OYG Joint Venture), Rox will earn a 50% interest, by paying $3,000,000 in cash, with a sole fee already paid of $250,000.

Rox will exclusively fund $2,000,000 for drilling programmes, as well as other expenses (relevant to on-ground expenditure) within in the OYG joint venture. Rox is able to grow its stake in OYG Joint Venture.

From the Tenements of the OYG Joint Venture, Venus will be eligible to a 0.7% Net Smelter Royalty on all gold and other minerals.

Managing Director of Venus, Matthew Hogan, commented on the option-to-purchase transaction:

‘[J]oining forces with Rox Resources at Youanmi is a great deal for Venus, in regard to the way in which the company has managed to arrange the settlement of the Youanmi Gold Mine acquisition which is with minimal dilution to VMC shareholders coupled with mitigating risk.

‘[T]he mine site is highly prospective for further additions to the established to the established JORC resource estimates for 1.19 million ounces within the mining leases, and significant drill testing programs will commence as soon as possible on numerous geochemical and EM anomalies identified along strike to the north and south from the recent Penny West discovery site by Spectrum Metals Limited.

Venus looks forward to a long and constructive engagement with Rox Resources at Youanmi.’

Venus Metals’ share price 2019 outlook

The completion date for a transaction is set to as soon as possible, yet the binding term sheet between VMC and Rox is still dependant on conditions.

It’s normal for a stock to rise or fall after exciting news, such as a transaction-to-purchase settlement — which we believe is the main driving force behind Venus Metals’ varying share price.

But investors should wait on further testing as Youanmi mines prioritises targets in order to see sustained increases to Venus Metals’ share price.

More to come.


Ryan Clarkson-Ledward,
For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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