Steadright Critical Minerals, a Canadian company, has recently retracted its agreement to acquire a 50% stake in a Moroccan firm specializing in the crushing and grinding of minerals. This deal was significant, amounting to several million dollars in both stock and cash. However, the company has indicated that it will not abandon the project altogether and intends to pursue renegotiations.
On October 6, three months after announcing the acquisition, Steadright Critical Minerals declared the cancellation of its agreement with Maghreb Atlas Trading Sarl and Mining Research Company. This agreement was initially signed on June 27, aiming for Steadright to obtain half of the capital while the two Moroccan partners would retain 25% each. To finance this acquisition, Steadright was required to issue five million shares to each of the two sellers, totaling ten million shares valued at CAD 0.20 each. Additionally, a payment of €700,000 was set to be placed in a lawyer's trust account, and the company had committed to potentially spend up to CAD 480,000 more for repairs and restoration of the site and equipment.
A Cancellation, Yet Not the End
The recent announcement marks a turning point in the situation. In their statement, Steadright has noted the cancellation of the purchase agreement but has not provided specific reasons for this decision. Notably, the company has stated its intention to engage in new negotiations regarding the transaction, which is a crucial aspect of this development.
The initial agreement had already included provisions for a thorough assessment of the land, crushers, and grinding facilities before the payment of the €700,000. Steadright had reserved the right to renegotiate or terminate the operation if significant discrepancies were uncovered during this evaluation. While the company has not clarified whether this clause contributed to the recent cancellation, it remains a possibility.
Steadright aimed to utilize these facilities to streamline the processing of minerals from its various Moroccan projects. The company is already active in Morocco with several projects, including TitanBeach, a large titanium initiative located in the southern region of the country. A first area of 16 square kilometers received a mining license in August.
Shortly thereafter, the group announced preparations for a pilot plant for TitanBeach. The cancellation of the crushing equipment acquisition does not jeopardize these permits or the anticipated development of the project, which now relies on a distinct structure.
This is not the first Moroccan transaction that Steadright has halted this year. Back in June, the company abandoned its plans to acquire an 80% stake in Exterra Mining & Exploration SARL, citing incomplete and insufficient financial documents at that time. In contrast, with the crushing equipment deal, Steadright is keeping the door open for further discussions, indicating that negotiations will resume on new terms.
As reported by bladi.net.
