Sarama Resources Limited (“Sarma” or the “Company”) (TSX-V: SWA, ASX: SRR) is pleased to provide a corporate update on matters relating to its arbitration claim (the “Claim”), the acquisition of Western Australian gold properties and copper-gold exploration in New South Wales, Australia.
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- Sarma sells Western Australian gold assets to Riddell for A$4.6M in cash and shares
- Sarma holds ~32%2,3 stake in Riedel, increasing to ~44%2,3 at performance milestone
- US$242M arbitration claim (+interest) to proceed; Hearing scheduled for February 2027
- Strategy preserves claim and exploration risk while minimizing shareholder dilution
- NSW copper-gold tenure secured; Potential low-cost entry into the Lachlan Fold belt
Sarama’s Executive Chairman, Andrew Dinning, commented:
“We are pleased to report strong progress in enhancing value in both the arbitration claim and exploration portfolio, providing a clear path forward. Finalizing the merits hearing date is an important milestone in the arbitration process and in addition, the transaction with Riedel enables Sarama to retain meaningful exposure to its Western Australian gold assets while minimizing any potential future loss award. The addition of the new copper-gold tenure in New South Wales gives us the opportunity to commence copper-gold construction. “There is a low cost opportunity for the company to have optionality in its exploration portfolio as we work through the arbitrage process.”
Western Australian Gold Assets
As part of the Company’s broader equity and capital management strategy, and to manage claim risk while maintaining exploration upside, Sarama has entered into a binding share sale agreement (“SSA”) with Riedel Resources Limited (“Riedel”) (ASX:RIE) to sell its Cosmo and Mount Wayne projects (the “Projects”) in exchange for equity consideration and payment of certain project-related expenses (the “Transaction”).
In connection with the proposed transaction, Riedel has received a commitment to raise $2.5 million (before costs) through a two-tranche placement of $0.025 per share to fund exploration in its exploration portfolio and working capital. Upon completion, Riedel expects to have approximately A$4 million in cash1.
The transaction will provide Sarma with a significant equity interest in Riedel, which will be transformed into a well-funded, multi-project gold explorer with several large projects in the Tier 1 jurisdictions of Western Australia and Arizona, United States.
Andrew Dinning has been appointed as non-executive director of Riedel2And it is proposed that Paul Schmiede will be appointed Chief Executive Officer upon completion of the transaction. Jack Hamilton will take on the role of Special Advisor-Exploration with oversight of exploration activities on the three projects. The Company will retain the services of Mr. Schmiede and Mr. Hamilton as necessary to ensure business continuity, while Mr. Dinning will continue in his full-time role as Executive Chairman.
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