Silica sands developer Diatreme Resources (ASX:DRX) has announced the divestment of its Cape Flattery Silica Project.
The transaction involves Diatreme's wholly owned subsidiary, Metallica Minerals, entering into a binding share sale agreement with Cape Silica, a joint venture company currently owned 73.2% by Diatreme and 26.8% by Sibelco Silica.
The internal restructuring is designed to streamline the ownership of regional silica sand assets, enabling consolidated project costs and a more focused development pathway for the company's flagship Northern Silica Project.
The parties have agreed on a valuation of $26.01 million for the CFSP. In exchange for the asset, Diatreme will receive additional shares in the joint venture.
To maintain the current ownership balance, Sibelco will contribute approximately $9.5 million in total funding.
This includes an immediate subscription of $5.1 million for shares in CSH upon the transfer of the project, with an option to subscribe for a further $4.4 million before July.
The joint venture will reimburse Diatreme approximately $2.1 million for costs associated with the Metallica takeover completed in late 2024.
Furthermore, the transaction injects roughly $7.4 million in fresh funding into the joint venture.
The sale remains subject to shareholder approval, which the company intends to seek as soon as practicable.
At the time of reporting, Diatreme Resources’ share price was $0.018.