Essex Minerals agrees to acquire its Australian joint venture partner KNX Resources in an all-stock deal

Essex Minerals Inc (CVE:ESX) (OTCQB:ESXMF) (FRA:EWX1) said it has agreed to acquire its privately-held Australian joint venture partner KNX Resources Ltd in an all-stock transaction.

The company said buying KNX is the best way to acquire the balance of KNX’s interest in the Australian gold properties while also giving Essex an Australian operating subsidiary with accumulated tax losses.

“The acquisition of KNX gives Essex shareholders significantly greater exposure to any discoveries made on these three large Australian gold and gold-silver exploration properties,” Essex Minerals CEO Paul Loudon said in a statement.  

READ: Essex Minerals looking to provide project finance for “mid-tier producer sweet spot”

“The 2021 field season is now commencing, with drill programs being planned for all three properties over the next eight months,” Loudon added.

Essex noted it will own an 83% interest in the Cumberland and Compass Creek Projects and 100% of the Mt Turner Project once its acquisition of KNX Resources is complete.

Essex Minerals will issue 5 million of its common shares to pay for the purchase of KNX, with KNX shareholders expected to receive one Essex share for each 4.052 KNX shares held.

Under the terms of the 2020 joint venture agreement between the two companies, Essex earned an initial 50% interest in KNX’s share of the three Australian gold properties by spending A$1million on exploration.

Essex then had the right to acquire the balance of KNX’s interest in the properties at independent valuation or earn an additional 25% interest in Mt Turner and 20% interest in Cumberland and Compass Creek by financing a further A$3 million on exploration.

The Cumberland property comprises four granted exploration permits covering 250 square kilometres (km), 70 km northwest of the former 5 million-ounce Kidston gold mine, while Compass Creek property comprises two granted exploration permits covering 48 square kilometres in the Pine Creek goldfield, 28 km north of Kirkland Lake’s 2Union Reefs mill in Australia’s Northern Territory.

Essex Minerals is a mineral exploration and development company focused on opportunities where it can adopt an option earn-in and joint venture model, with a particular emphasis gold projects in Tier 1 jurisdictions.

Contact Sean at [email protected]

Story by ProactiveInvestors