The Archer Materials Ltd (ASX: AXE) share price leapt higher on open this morning on news the company has sold 2 mineral exploration licenses.
At the time of writing, the Archer share price is trading 1.9% higher at 53.5 cents. Here's what you need to know.
What did Archer Materials report?
Today, Archer Materials advised it has entered into a legally binding agreement to sell 2 of its mineral exploration licenses on South Australia's Eyre Peninsula. The sale does not need Archer shareholder approval.
Baudin Minerals, a private company, will pay $2.0 million for the licenses, along with a bonus share payment after it lists on a stock exchange, as planned. In addition, Archer will receive a 2% net smelter return royalty if Baudin discovers and begins mining for minerals.
Archer also revealed it will retain the right to explore for, and mine, graphite on both tenements.
The company said the sale matched its business strategy to sell off non-core mineral exploration assets, using the funds for its materials technology development. Its core focus is developing its CQ room temperature quantum computing chip and graphene-based A1 Biochip.
Commenting on the sale, Archer chairman Greg English said:
We believe this is a good deal for our shareholders. The proceeds from the sale of the tenements will assist in the funding of our tech-related activities.
In addition to the upfront payment at completion, Archer will also receive royalty payments should the buyer discover minerals and commence mining on the tenements. The royalty would allow the company to financially benefit from any future development of these projects.
Archer share price and company snapshot
Archer is a materials technology company. It focuses on developing cutting edge technology in quantum computing, reliable energy and biotechnology. Archer's Australian-based mineral exploration projects span critical minerals like graphite, copper, tungsten, cobalt, and more. Archer Materials' shares listed on the ASX in August 2007.
Despite plummeting 48% in the first weeks of February during the COVID-19 market panic, Archer shareholders are well into the green in 2020. Year-to-date, the Archer share price is up a whopping 234%. By comparison the All Ordinaries Index (ASX: XAO) is up just over 1%.
