Central Australian Phosphate (ASX: CEN) shareholders will today decide on the company’s joint venture with Monument Mining (CVE:MMY) to develop its phosphate projects in Arganara, Lucy Creek and Warrabri in the Northern Territory.
This will be followed by immediately by a board meeting to consider the outcome of the shareholders’ meeting and the implications for the company.
Shares in the company have been placed into an ASX trading halt until the outcome of the board meeting is known and Central is in a position to make an announcement regarding its financial position, financial strategy and structure.
The halt will last until the earlier of an announcement being made to the market, or the opening of trade on Friday 28 June 2013.
Under the joint venture, Monument will invest up to A$8.8 million the phosphate projects to earn up to a 51% participating interest. This will include an upfront cash payment to Central of $1.5 million to reimburse it for past expenditure to earn a 10% interest.
Monument can also make a further investment of $7.3 million in the phosphate projects including a $2.5 million commitment to earn a further 20% participating interest within 12 months; an additional spend of $2.8 million to earn a further 12.5% interest within 36 months and a right to spend an additional $2 million to earn a further 8.5% participating interest within 54 months.
Monument will also have the right of first refusal to enter into offtake sales contracts for Central's share.
Central will also retain control and ownership of all its non phosphate projects.
The company has also recommended shareholders to take no action regarding the off-market takeover from Rum Jungle Resources (ASX:RUM), which has also launched its own joint venture proposal.
Central’s Arganara phosphate project and Rum Jungle's Barrow Creek 1 are located next to each other about 150 kilometres south of Tennant Creek in Northern Territory.
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