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Ragnar Sell Swedish Subsidiary to BHP for $9.8m to Fund Critical Exploration

26 June 2023 13:37
ASX: RAG

After a quiet few months, Rangar Metals (ASX: RAG) has returned to the boards in a big way, having sold its Swedish subsidiary to Australian mining behemoth BHP for $9.8 million, acquiring four new critical-metal projects in Sweden and raising a massive $1.89m through an entitlement offer to fund both the divestment to BHP and exploration activities at its new holdings.

Selling Swedish Sulphides

First off the line, Ragnar entered into a conditional agreement to dispose of its wholly owned subsidiary Ragnar Metals Sweden, including tenements and exploration licences over the Tullsta Nickel Project, to BHP’s exploration subsidiary BHP Metals Exploration Pty Ltd, with the sale expected to be complete by the end of September.

While the massive $9.8 million cash consideration will not be paid until the sale is complete, Ragnar will also receive a deferred consideration in the form of a 1% Net Smelter Return Royalty payable upon commencement of production, with BHP having the option to by back this royalty for an additional $10 million dollar cash payment.

Ragnar highlighted that the sale is a validation of both the Company’s original strategy and the potential of the Tullsta Nickel Project and that the royalty allows it to retain some exposure to the promising project which has shown signs of potentially hosting an extensive Ni-Cu-Co system, while also delivering a significant cash injection to fund its newly acquired projects.

Gaining Ground

With its flagship Ni-Cu-Co Project now divested, Ragnar is shifting its focus towards lithium and rare earth elements, having identified and acquired two REE projects and two lithium projects in Sweden following an extensive review of country-wide datasets.

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Figure 1: Map detailing the newly acquired lithium projects

The two lithium licences, Halleberget and Bergon, have already been confirmed to host lithium-tantalum-tin-bearing pegmatites, showing respective historical exploration hits up to 0.473% Li2O and 0.172% Li2O respectively, and are located in an area interpreted to occur in the western extent of the same geological terrain that contains the Kaustinen Lithium Province, Scandinavia’s largest lithium deposit.

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Figure 2: Map detailing the newly acquired REE Projects

The new REE projects, Olserum North and Gruvhagen, meanwhile comprise 37.3 square kilometres of tenure highly prospective for rare earth elements in Swedens Fennoscandian Province, which is renowned for REE deposits and home to the country’s largest REE deposit Norma Karr.

Exploration will focus on heavy rare earths at Olserum North, which is located 8.5km north of the Olserum heavy REE deposit and has shown historical results of 4,044 ppm TREE with 63 per cent heavy REE, and on NdPr at Gruvhagen, which has shown exploration results of 36,921 ppm TREO with very high Nd/Pr content of 30 per cent.

Maiden exploration is already underway at the new Project, with the Company looking to put the drill to all four projects by the end of the year.

Cashed Up

Ragnar has also announced an entitlement issue to raise $1.89 million dollars to grant the Company general working capital alongside costs of the divestment of Ragnar Metals Sweden and funding the planned exploration programs at its four new projects, with the offer being made to all shareholders next week.

Between the offer and the A$9.8 million received from the sale of Ragnar Metals Sweden, the Company said it is well-funded to keep up the momentum and unearth the potential of its new projects.

“This transaction provides exceptional value for the Company with a substantial initial cash injection and exposure to production through the Royalty. I am excited to continue working with BHP to finalise the transaction and then re-direct our attention to exploring further critical mineral opportunities in Sweden,” Executive Director Eddie King said.

“We are excited to expand our exploration portfolio with highly prospective lithium projects, in one of the world’s best mining jurisdictions. We believe Sweden’s lithium potential is still to be unlocked, so we remain very committed to continued success as one of Sweden’s most active and effective explorers for critical minerals.”

“Olserum and Gruvhagen strongly complement our critical minerals portfolio and we look forward to working with our existing in-country experts as well as new stakeholders. We remain committed to creating shareholder value as an active and effective explorer for critical minerals in Sweden.”

RAG’s latest moves have obviously resonated with investors, with the explorer’s ASX-listed share price jumping 30 per cent to trade at 2.6c (UTC +8 hours).

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