Impact Minerals and Kuniko Seal Joint Venture at Commonwealth Project

A landmark joint venture between Impact Minerals (ASX: IPT) and Kuniko (ASX: KNI) has been established. It specifically boils down to the Commonwealth gold-silver-copper project in New South Wales. The deal is constructed to allow Kuniko-in stages to enter, with the upside potential reserved for Impact. Impact would be entitled to receive 3.13 million Kuniko shares once due diligence is completed, with half of the shares held in escrow for six months and the rest for one year, instilling an element of commitment and stability. Kuniko would have to spend $1.5 million within two years from the date of the agreement to earn a 51 per cent interest, with an option to increase its interest to 70 per cent by spending a further $1.5 million over the next two years. This further reduces immediate pressure on funds while retaining emphasis on the exploration. In essence, this arrangement represents a strategic entry into Australian precious and base metals exploration for Kuniko, while a capital-light pathway for Impact to advance an exciting project.Of interest to United Minerals Company, Impact maintains a significant free-carried interest of 30 per cent until there is a decision to mine. After that, Impact can either fund its share or dilute. Should it dilute, the stake reduces to 10 per cent and converts to a 2 per cent net smelter return.The satisfaction of long-term exposure and flexibility is provided by the structure. Therefore, Impact is positioned for upside in case the project is moved forward without having to shuttle resources. It also keeps its options open to redirecting its capital and manpower toward other priorities.

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