Creasy Deal A Boon For Transformed Legend
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Following the sale of its Cameroon project interests for total consideration of $17.5m, Legend has now completed a Fraser Range farm-in deal with Mark Creasy, making it one of the region’s biggest players.
|Status: Advanced Explorer|
|Size: Small Cap|
|Commodity Exposure: Nickel|
|Share Price: $0.01|
|12-month Range: $0.006 - $0.013|
|Shares: 1.96b, Options: 30m|
|Top 20: 53%|
|Net Cash & Liquids: $12m|
|Market Value: $20m|
|Key Parameters||Rating (✓out of 5)||Quarterly Statistics|
|Management Quality||✓✓✓✓✓||Q2 2015 Exploration Spend: $0.127m|
|Financial Security||✓✓✓✓✓||Q2 2015 Administration Spend: $0.274m|
|Project Quality||✓✓✓✓✓||Exploration Spend 32%, Admin Spend 68%|
|Exploration / Resource Potential||✓✓✓✓✓||Q3 2015 Forecast Exploration Spend: $0.2m|
|Project Risk||✓✓✓✓✓||Q3 2015 Forecast Admin. Spend: $0.3m|
We originally followed Legend Mining based on the potential of its vast Ngovayang iron ore project area in Cameroon, West Africa – which was also prospective for other minerals. Legend maintained a committed exploration focus and was consistent in terms of adding value - despite the trials and tribulations of a volatile market for iron ore plays over recent years. All this culminated in a sizeable corporate transaction that has subsequently left Legend strongly cashed-up and able to secure the right exploration opportunity.
Legend last year entered into a Share Sale and Debt Assignment Agreement (SSDAA) with a wholly-owned subsidiary of India’s Jindal Steel and Power, with respect to the sale of its existing Cameroon assets. The attractive $17.5 million sale terms comprised both a sizeable upfront cash payment, along with staged subsequent cash payments, allowing it to focus on its priority Fraser Range exploration targets in WA. As a result, Legend has undergone a significant corporate transformation.
All of this has culminated in what I consider to be a potentially company-transforming transaction, establishing Legend Mining as one of the dominant players in the high-profile Fraser Range exploration province. The company has completed a transaction with hugely-successful and well-respected exploration sector identity, Mark Creasy, which will allow Legend acquire a 70% stake in an extensive 2,530 sq km exploration package. Mark Creasy already maintains a 25% shareholding in Legend Mining.
Fraser Range Focus
Legend Mining has received almost-unanimous shareholder approval for what is in many respects a potentially company-transforming transaction, allowing it to establish itself as one of the dominant players in Western Australia’s Fraser Range exploration province.
The transaction with hugely-successful Western Australian exploration identity, Mark Creasy, has seen Legend acquire an extensive 2,530 sq km exploration package. The deal settled on 23rd September 2015.
Legend has acquired a 70% stake in tenements E28/2188-2192, E28/1718 and E28/1727, with consideration comprising:
- $2.5 million cash payment;
- 71.5 million Legend shares at a deemed price of $0.007 ($500,500);
- 150 million five-year Legend options exercisable at $0.04.
Legend will sole-fund exploration and free-carry Creasy Group's 30% interest through to the signing of Mining Venture Agreements.
The tenement package encompasses 100 km of strike length along a regional gravity high, that’s associated with dense mafic/ultramafic intrusive rocks of the Fraser Zone, within the larger Albany-Fraser Orogen. The new tenements straddle the southern boundary of Legend's existing granted tenements.
The Creasy deal has been a long time in the planning. We believe it is an enormously significant one that provides Legend with access to high-quality exploration acreage, 120km northeast of Sirius Resources’ (ASX: SIR) Nova-Bollinger nickel-copper deposit.
Legend originally identified the prospectivity of the new tenements following assessment of regional aeromagnetic and gravity survey data, along with extensive publically-available datasets encompassing the entire Fraser Range district. The acquisition also includes high-quality aeromagnetic and gravity datasets, with Creasy Group drilling having already identified prospective nickel host rocks.
The shares and options received by Creasy Group are subject to restrictions that prevent their sale or transfer for a period of 12 months from the date of issue.
The Rockford Project is located within the Fraser Range district of Western Australia and comprises a combination of existing Legend tenements (409 sq km) and an extensive package of new tenements (2,530 sq km) in which Legend is acquiring a 70% interest from the Creasy Group. Exploration is targeting Nova-style nickel-copper and Tropicana-style structurally-controlled gold mineralisation.
Legend’s existing ground holding encompasses one granted exploration licence (E28/2342) and four exploration licence applications.
Exploration to date on E28/2342 has involved a detailed aeromagnetic survey with follow-up moving loop electromagnetic surveys over eight features showing characteristics of mafic/ultramafic intrusions.
Legend has recently commenced a moving loop electromagnetic (MLEM) survey over selected target areas at its newly acquired Rockford Project.
Legend maintains strong cash reserves of $11.3m post-acquisition to fund exploration activity, with a further $3m to be received during mid-December 2015 from Jindal following last year’s Cameroon project sale last year. Mark Creasy is an existing 25% shareholder in Legend. The company’s solid financial position and committed exploration team leaves it well placed to evaluate and add value to its Fraser Range asset base. Of all the ASX-listed Fraser Range exploration opportunities, Legend is probably the lowest profile - but with the biggest cash balance. Accordingly, Legend Mining will remain firmly on our Portfolio Watch-List and we await initial MLEM survey results from Rockford.
After a decade as a broking resources analyst with Intersuisse, Gavin helped establish the Fat Prophets Mining Report during 2005, writing and producing the report until he established MineLife during late 2010. He writes about mining and energy companies via his MineLife reports.
Disclaimer: Gavin Wendt, who is a director of Mine Life Pty Ltd ACN 140 028 799, compiled this document. It does not constitute investment advice. In preparing this report, no account was taken of the investment objectives, financial situation and particular needs of any particular person. Before making an investment decision on the basis of this report, investors and prospective investors need to consider, with or without the assistance of a securities adviser, whether the information is appropriate in light of the particular investment needs, objectives and financial circumstances of the investor or the prospective investor. Although the information contained in this publication has been obtained from sources considered and believed to be both reliable and accurate, no responsibility is accepted for any opinion expressed or for any error or omission in that information.