Archer Materials doubles share purchase plan target with applications valued at $6.363 million

Archer Materials Ltd (ASX:AXE) closed its share purchase plan on Monday, June 22, 2020, after receiving total applications valued at $6.363 million, exceeding the target of $3 million. The board will accept all valid applications and there will be no scale back, meaning that applicants who submitted a valid application will receive the number of shares for which they applied, with no scale back. The company will issue and allot 10,605,250 new SPP shares on Tuesday, June 30, 2020, with holding statements despatched to shareholders on or around Wednesday, July 1, 2020. Monetising Leigh Creek Magnesite Project The company also revealed that Canadian Stock Exchange-listed Volatus Capital Corp (CNSX:VC) has acquired all of the shares in one of the purchasers of Leigh Creek Magnesite Project. Archer executive chairman Greg English said: “The transaction is an excellent outcome for the company and allows Archer to monetise the project and to fund our other activities without the need to issue new shares and further dilute shareholders. “We have a strong track record in monetising our exploration and other assets and have received approximately $12 million from the sale of these assets, including the sale of the project.” Transaction details In 2018 Archer announced the sale of the project for $2 million plus a bonus payment, receiving $250,000 in 2018 with the remaining $1.75 million to be received at completion of the sale and purchase of the project. In late 2019, the purchase price was increased to $2.25 million ($2 million payable at completion) plus the bonus payment. The company will receive $2 million worth of Volatus shares plus an additional number of shares equal to 5% of the Volatus market capitalisation, and those shares will be subject to escrow for four months. Archer will also receive a bonus payment equal to 5% of the value of any future transaction should the second purchaser at any time sell its share of the project or list on any stock exchange. FIRB approval On March 29, 2020, the Australian Government announced changes to its foreign investment review framework due to the impacts of the coronavirus outbreak and reduced the monetary threshold for all inbound investment to $0. As a result of these changes, the transaction requires approval by the Foreign Investment Review Board (FIRB), who have up to six months to decide. Going forwards, Archer will continue to provide technical assistance and support to the purchasers and Volatus to aid in the development of the project.