Gold project sold, balance sheet now even stronger

Published 09-AUG-2022 14:23 P.M.

1 min read

Earlier this week our rare earths exploration Investment Lanthanein Resources (ASX: LNR) put out an update on the sale of its PNG gold project.

The deal comes after ASX listed Tempest Minerals put in a takeover offer for Lole Mining which holds the gold project.

As part of the deal LNR will receive a total of $2M split as follows:

Initial consideration:

$500,000 cash
$1.5M in either cash or shares at the election of Lole Mining

Deferred consideration:

$1M within 5 years or before a JORC resource of 500,000 oz of gold in the indicated category is defined.

LNR therefore should receive the initial consideration of ~$2M in cash/shares no later than 28 September 2022.

After recently completing a $1.75M capital raise and with $4M in cash in the bank at 30 June 2022, LNR is adding to what we think is an already extremely strong balance sheet for an exploration company.

With a market cap of just $24M (after the recent placement shares are issued), we expect LNR to have ~$7.75M in cash/financial assets after the placement is completed and the gold project is sold.

This should mean the company trades with an enterprise value (EV) of ~$13.25M leading up to its drilling program at its REE projects along strike from Hastings Technology Metals (capped at $416M) and next door to Dreadnought Resources (capped at $228M).

Next: We want to see LNR start and complete all of the pre-drilling works to enable the company to drill its REE targets this quarter.