Mosman Oil and Gas Ltd has sold a 2% STEP Royalty for NZ$4 million to Ridge Royalty Corp.
The sale of the STEP Royalty for NZ$4 million provides funding for 40% of Mosman’s purchase of the recently announced STEP Acquisition. Mosman is also actively negotiating other funding alternatives to finance the balance of up to 70% of the STEP Acquisition, with the remaining 30% of the STEP Acquisition to be acquired by WRDLS Pty Ltd.
John W Barr, Chairman of Mosman, said: “We are delighted to have secured a large proportion of the funding for the STEP Acquisition, one which the Board sees great value in and believes will be transformational for Mosman. The sale of the STEP Royalty to Ridge is an effective funding mechanism as it delivers funding for our minimum target of 40% of the STEP Acquisition and does not involve any share dilution or debt. We continue to actively negotiate several other funding options to finance up to 70% of the STEP Acquisition. Mosman is also very pleased to have granted Ridge a right of first refusal to acquire similar royalties on Mosman’s other projects as this presents a means of potentially funding those in future.”
The total consideration for the STEP Acquisition is NZ$10 million to be paid in two tranches following the 5% deposit which was paid by Mosman in early September. Mosman’s acquisition costs, based on 70% ownership, would be NZ$7 million, the first tranche being NZ$4.9 million and the second tranche being NZ$2.1 million.
Edited from press release by Angharad Lock