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Raiden enters Option Agreement with Mallina Co for Arrow Gold Project

9 May 2024 10:19
ASX: RDN

Raiden Resources (ASX:RDN) has entered an Option Agreement with Discovery Co subsidiary, Mallina Co, regarding the Arrow Gold Project in Western Australia’s Pilbara region.

Mallina will now operate the Project, while Raiden will oversee the Lithium-Caesium-Tantalum (LCT) program.

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Figure 1: Raiden’s Arrow Project and associated infrastructure.

Strategic transaction

Raiden’s divestment of the Arrow Project represents its 5th transaction involving non-core assets. This strategic move is geared towards enabling aggressive exploration campaigns across its project portfolio, with the aim of enhancing the likelihood of discovering significant resources.

Raiden Resources‘ Managing Director, Dusko Ljubojevic, highlighted the crucial role of forging strategic partnerships.

“With this transaction, management continues to deliver on our strategy of generating strategic partnerships over the non-core assets to ensure that aggressive exploration campaigns are delivered and to maximise the discovery potential,” he said.

Terms of transaction

Despite Mallina’s significant earn-in, Raiden will retain its 100% stake in the Project’s LCT-style mineralisation.

Additionally, Mallina’s $600,000 exploration commitment includes a minimum of 3,000 metres of Air Core (AC) drilling to be completed within 12 months of agreement execution

Upon electing to proceed with the Farm-In option at the Minimum Obligation meeting, Mallina will pay Raiden either $250,000 in cash or company shares, depending on Raiden’s listing status on the Australian Securities Exchange.

Following the Minimum Obligation Period (MOP), Mallina expects to receive 2 options to increase its Project interest.

To earn 51%, Mallina must solely finance an additional 17,000-metre diamond or Reverse Circulation (RC) drilling campaign within 24 months of the MOP.

To achieve a 75% interest, Mallina must finance either diamond/RC drilling or complete a pre-feasibility study on the Project within 60 months of MOP completion.

Subject to Mallina’s 75% earn-in, Raiden will either retain its interest via exploration and development co-funding or sell its interest, with Mallina holding rights to the first offer.

However, if either Mallina or Raiden decides to reduce its ownership by 10% or less, that party will no longer retain its original ownership and its interest will convert into a 1% net smelter return royalty.

Managing Director expectations

Mallina’s board comprises experienced individuals with a track record of discovery, and Mr. Ljubojevic anticipates they will continue to excel in their roles.

“The Company remains focused on the primary objectives, namely drilling the Andover North and South lithium projects.

“The Mallina team is led by an accomplished technical and corporate team, with a track record of discovery. We hope that their experience will lead to further technical success on the Arrow Project.

“In parallel, we plan to continue with the LCT exploration program on the Arrow Project,” he added.

RDN’s Australian Security Exchange-listed share price is currently trading at $0.044 (10:15 am UTC+ 8 hours).

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