Straits announced on 8 February 2012 that it had reached an agreement with Ancoa NL (Ancoa)and Emu Nickel Ltd (ASX: EMU) for the sale of the Hillgrove Antimony /Gold Mine.

The transaction is based on the terms previously negotiated with Ancoa as announced to the market on 26 August 2011, with the major change being that the agreement with Ancoa has been amended to permit EMU to acquire Ancoa, with the right to purchase Hillgrove, which would achieve a listing of Hillgrove as the asset of EMU (rather than via a separate IPO by Ancoa).  

The main variation to the agreement previously made with Ancoa is that the consideration payable remains at $40 million, but is changed to:

• $10 million cash; and
• $30 million convertible note (41% premium exercisable within 5 years, interest payable at 12.5% pa after year 1).

The terms of the sale are subject to EMU shareholders approving its acquisition of Ancoa, as well as EMU raising sufficient funds to make the acquisition, and therefore remains subject to market conditions.

Under the capital raising proposed by EMU, Straits shareholders will have a priority entitlement to shares issued by EMU up to $15 million in aggregate – further details of which entitlement will be provided by EMU in the prospectus to be issued by it and which will be provided to Straits shareholders in due course.