MGX Resources to Sell Koolan Island Iron Ore Operation to Crestlink
MGX Resources (ASX:MGX) agreed to divest its stake in the Koolan Island iron ore operation to infrastructure and logistics provider Crestlink Koolan for up-front and deferred payments of AU$20.2 million and a future revenue share component of up to an additional AU$5 million, according to a Thursday filing with the Australian bourse.The deal is structured as the sale to Crestlink of all the shares in MGX's Aztec Resources subsidiary on a cash and debt-free basis, with MGX retaining the benefit of revenue from ore shipped before the sale's completion.Crestlink will also assume the rehabilitation obligations that are outstanding at completion, which are expected to be around AU$30 million, per the filing.MGX expects to complete its low-grade iron ore shipping program at Koolan Island in July before it ramps down site operations.Following the deal's expected completion later in the year, Crestlink will use Koolan Island's infrastructure assets to set up a logistics base for offshore energy, government, and defense-related stakeholders. It will also continue to explore future mining opportunities on the island.MGX Resources shares gained 1% in recent Thursday trade.
