Australian mineral explorer New Century Resources <NCZ.AX> said on Tuesday nickel miner IGO Ltd <IGO.AX> would buy out nearly one-fifth of the company by subscribing for shares under a capital raising plan, with further plans for a partnership.
IGO would acquire a stake of up to 18.4% by investing not more than A$27 million ($17.12 million), as part of an A$51.1 million capital raising plan.
Under the capital raise, the issue price of new NCZ shares will be A$0.15 per share, equal to its last closing price. The stock has been on a trading halt since April 14.
New Century and IGO have also agreed to a 'strategic relationship', which would enable them to collaborate on opportunities within New Century's existing tenements or other mining assets, primarily within the clean energy metals sector.
The arrangement, which will lapse if IGO's stake falls below 10% for more than 30 consecutive trading days, would allow the parties to enter into a joint venture or other commercial arrangements when a suitable asset is identified.
IGO will also have the right to appoint one member to the New Century board after the capital raising, subject to its maintaining a 10% stake.
Last month, IGO had entered an A$15 million earn-in agreement with Encounter Resources <ENR.AX> in the Paterson Province of Western Australia, with the possibility of the formation of a 70:30 joint venture.
(Reporting by Arundhati Dutta in Bengaluru; Editing by Ramakrishnan M.)
