Boadicea Resources shines on news of special dividend for shareholders

Boadicea Resources Ltd (ASX:BOA) investors have responded strongly to news of the payment of an 8-cent unfranked dividend with shares hitting a new five-year high. The dividend follows the recent ‘transformational’ agreement with major Fraser Range nickel producer IGO Ltd (ASX:IGO) that involves the conditional sale of nine Boadicea tenements within the range for an upfront cash consideration of $7 million. Agreement with IGO This arrangement will see IGO explore these tenements that are prospective for nickel-copper sulphides for up to five years at no cost to Boadicea and this arrangement has a potential total future value of $50 million, plus a 0.75% royalty. At the time of the arrangement, Boadicea decided to allocate a portion of the initial sale proceeds to shareholders in the form of a special dividend, subject to shareholder approval. Reward for loyal shareholders Managing director Jon Reynolds said: “We are returning an 8-cent dividend back to shareholders - that’s close to $4.5 million. “A majority of our shareholders have been exceptionally loyal to the company for a number of years. “That’s going to leave us around $2.5 million for general working capital, to progress our projects and allow us to explore new business opportunities.” Stocks on the move Stocks have been on the move since the IGO arrangement and a BOA announcement this week about details of the dividend added to the momentum. On Wednesday, shares increased to 38 cents from 30 cents and yesterday hit a new five-year high of 39 cents, up from 20 cents at market close on August 28. General meeting While the company has laid out a path to future growth, a general meeting next Wednesday will enable shareholders to firm-up the way forward. The primary purpose is to vote on the following resolution: “That, for the purposes of Listing Rule 11.2, and for all other purposes, approval is given for the sale of the Fraser Range Assets to IGO Newsearch Pty Ltd pursuant to the Asset Sale Agreement, a summary of which is contained in the Notice of General Meeting & Explanatory Statement.” The meeting will be held online at 11.00am Australian Eastern Daylight Time (AEDT), on Wednesday,  October 14, 2020. New era dawns for Boadicea Resources View more about the company’s new era in this video (click here). Approval of the resolution will provide for the dividend payment to proceed along with IGO’s non-refundable upfront consideration of $5.5 million in cash and a payment of $1.5 million to subscribe for 6.25 million BOA shares at 24 cents per share. IGO will not participate in the Special Dividend. Strong post-dividend position The company’s post-dividend position will be 61 million shares with cash of $2.5 million while the value of the tenements is retained and there is strong upside with the potential future sale price of $50 million, plus a 0.75% revenue royalty. In deciding upon an unfranked dividend, the board sought independent advice from a number of sources and this was recommended as providing the most value option to shareholders. The company’s rationale in allowing shareholders to directly benefit from the IGO agreement is to reward them for their patience. Boadicea will also be armed with sufficient capital to enable it to immediately undertake an aggressive exploration campaign on key tenements as well as allow for ongoing working capital requirements. “Solid financial position” Reynolds said previously: “Despite the difficult year that 2020 has proven to be, including COVID-19, funding challenges and the untimely death of Clarke Dudley [founder, managing director and executive chairman], the company has emerged in a solid financial position, new exploration targets and is ready for the new challenges that lay ahead. “Concern for shareholders is one of the hallmark values of the company and this concern as many of you would be aware from your interactions with Clarke, is genuine. The board and management shall continue to work for you, the shareholders.” Koongulla acquisition brings breadth to Boadicea story View more about the company’s Koongulla acquisition in this video (click here).