Mallee Resources Limited (ASX:MYL) has agreed to sell its Myanmar subsidiary, Bright Mountain Resources (Myanmar) Limited (BMR).
The company will sell all the shares in BMR to 24 Hour Mining & Industry Company Limited’s subsidiary, Myanmar Airways International Company Limited (MAI).
24 Hour Mining & Industry Company Limited owns and operates several large infrastructure, mining and aviation businesses in Myanmar, including Myanmar Airways International which operates international flights between Yangon and destinations across Southeast Asia.
Pursuant to the terms of the sale transaction, Mallee is to receive a total of US$10.2 million for its shareholding in BMR. Settlement of the transaction will occur in tranches over the next six months with completion due by January 17, 2023. The performance of the transaction is subject to security in the form of a share pledge in favour of Mallee.
BMR’s sole asset was the residual cash balance of US$12.06 million remaining from the proceeds of the sale of the Group’s interests in the Bawdwin project.
Managing Director, John Lamb, said the company is of the view that the sale of BMR does not materially affect the disclosures in its Notice of General Meeting announced on 30 May 2022 (NOM) or its planned development programme for the Avebury Project set out in the NOM.
In terms of the pro forma balance sheet as shown in Schedule 3 of the NOM, the sale of BMR will result in cash and cash equivalents decreasing by A$16.9 million with current receivables increasing by A$14.3 million, with the net result that current assets are reduced by approximately A$2.6 million. Accumulated losses would increase by A$2.6 million.
Mr Lamb said Mallee is now focused on bringing the Avebury Nickel mine in Tasmania into production following recent completion of that acquisition.