Latitude 66 Unlocks Value with $2 Million Sale of Non-Core Asset
Latitude 66 Limited (ASX: LAT) has entered into a strategic agreement to sell its 17.5% interest in the Greater Duchess Copper Gold Joint Venture for an upfront payment of $2 million with potential additional value of up to $4 million through contingent considerations.
Strategic Divestment to Focus on Core Assets
Latitude 66 has taken decisive action to monetise a non-core asset, signing a non-binding term sheet with Argonaut Partners Pty Ltd and Neon Space Pty Ltd for the sale of its entire stake in the Greater Duchess Joint Venture. The transaction aligns with the company's strategy to optimise value from its Australian assets while providing non-dilutive funding to advance core projects.
"The Greater Duchess Joint Venture is a non-core asset and the sale transaction announced today is in line with our strategy to unlock value from our Australian assets," said Managing Director Grant Coyle.
The deal structure provides immediate capital while retaining significant upside potential through contingent considerations tied to future transactions. Joint Venture partner Carnaby Resources Limited (ASX: CNB) has been notified of its right of first refusal, which must be exercised within 30 days.
Transaction Details: Immediate Funding Plus Future Upside
The carefully structured transaction includes:
| Payment Type | Amount | Trigger |
|---|---|---|
| Upfront Cash | $2,000,000 | Payable upon completion |
| Contingent Payment Option 1 | $4,000,000 | If any party acquires 100% of JV within 90 days |
| Contingent Payment Option 2 | 50% of proceeds above $4M | If Purchaser divests to a party not acquiring 100% of JV |
In conjunction with the sale, Latitude has secured an unsecured loan of $750,000 from Argonaut Partners Pty Ltd, providing immediate working capital as the transaction progresses. The loan includes a 1% monthly interest rate commencing from 1 October 2025 and a $30,000 establishment fee.
Understanding Joint Venture Divestments
What is a Joint Venture Divestment?
A joint venture divestment occurs when a company sells its partial ownership stake in a collaborative project. For resource companies, these strategic sales can release capital for core operations while maintaining upside exposure through contingent considerations.
For investors, these transactions signal management's focus on capital allocation and strategic priorities. In Latitude 66's case, the structure provides immediate funding without diluting shareholders while preserving potential upside through the contingent payment mechanism.
How do contingent considerations work?
Contingent considerations are additional payments that may be received after the initial transaction, dependent on specific future events occurring. In mining sector transactions, these often relate to:
- Future transactions involving the asset (as in this case)
- Resource definition milestones
- Development achievements
- Production targets
These structures allow sellers to participate in future upside while providing buyers with potential risk mitigation. For Latitude 66, the contingent consideration provides continued exposure to potential premium valuations if the Greater Duchess Joint Venture becomes the subject of further corporate activity.
Project Background: Greater Duchess Copper Gold
The Greater Duchess Joint Venture forms part of the larger Greater Duchess Copper Gold Project, located approximately 70km southeast of Mount Isa in Queensland. The project encompasses twelve exploration permits and includes several established mineral resource estimates at Lady Fanny, Nil Desperandum, Duchess, Burke & Wills, and Mt Birnie.
Notably, Carnaby Resources, which holds the majority interest in the joint venture, released a Scoping Study for the Greater Duchess Project in May 2024, highlighting the project's advancing development status.
What is a Right of First Refusal?
A right of first refusal is a contractual right that gives an existing partner the option to match an offer before the selling partner can accept it from a third party. In this case:
- Latitude 66 has provided formal written notice to Carnaby Resources
- Carnaby has 30 days to exercise its right of first refusal
- If exercised, Carnaby would acquire Latitude's interest on terms no less favourable than those offered by Argonaut Partners and Neon Space
- If Carnaby exercises this right, the would-be purchasers would receive 7,500,000 unlisted options in Latitude 66 with an exercise price of $0.075 and an expiry date of 30 June 2028
Future Plans & Capital Allocation
The transaction provides Latitude 66 with immediate working capital through:
- $2 million upfront consideration upon completion
- $750,000 loan facility from Argonaut Partners
- Potential for up to $4 million in additional contingent value
"This transaction is well timed to provide Lat66 with near term, non-dilutive funding that will enable the Company to continue advancing its Finnish and Western Australian projects," stated Coyle.
The capital will be deployed toward the company's core assets, particularly its projects in Finland and Western Australia, as management executes its strategic focus on higher-priority opportunities.
Why Investors Should Monitor Latitude 66
This transaction demonstrates several positive attributes that investors should note:
- Non-dilutive funding: The $2 million sale plus $750,000 loan provides capital without issuing new shares
- Strategic focus: Clear commitment to core assets in Finland and Western Australia
- Value maximisation: Contingent consideration structure preserves upside potential
- Management execution: Ability to monetise non-core assets in challenging market conditions
The transaction's contingent payment structure is particularly noteworthy, as it provides shareholders with continued exposure to potential upside if the Greater Duchess Joint Venture attracts premium valuation through future transactions.
Transaction Timeline and Next Steps
The completion of the transaction remains subject to certain conditions, including Carnaby Resources' decision regarding its right of first refusal. The key dates and milestones include:
- 2 July 2025: Formal written notice provided to Carnaby Resources
- 1 August 2025 (approximately): End of Carnaby's 30-day right of first refusal period
- Post-decision: Completion of the transaction with either Carnaby Resources or the third-party purchasers
The loan facility provides Latitude 66 with working capital during this period, with repayment due upon the earlier of:
- Completion of the Joint Venture Interest acquisition
- Termination of the non-binding term sheet
- Termination of any agreement related to the acquisition
- An event affecting Carnaby's pre-emptive right that may impact the satisfaction of conditions precedent
- 12 months following the date of the loan agreement
Investor Considerations
For investors evaluating Latitude 66, this transaction offers several important insights:
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Strategic asset management: The company has demonstrated its ability to extract value from non-core assets, suggesting a disciplined approach to capital allocation.
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Financial flexibility: The transaction structure provides immediate funding while preserving upside potential, enabling the company to advance core projects without shareholder dilution.
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Management execution: The ability to secure transaction terms that include both immediate funding and contingent value demonstrates management's commercial capabilities.
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Core project focus: With fresh capital, investors should monitor progress at the company's Finnish and Western Australian projects, which may now benefit from accelerated development.
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Further non-core optimisation: This transaction may signal additional opportunities to optimise the company's asset portfolio, potentially creating further value for shareholders.
Latitude 66 has demonstrated effective capital management by converting a non-core asset into immediate funding while preserving significant upside potential. With fresh capital to advance its priority projects in Finland and Western Australia, investors should closely monitor the company's progress as it executes its focused strategy.
Want to Discover More About This Strategic Non-Dilutive Funding Opportunity?
To learn more about Latitude 66's strategic $2 million asset sale and how this non-dilutive funding will accelerate their Finnish and Western Australian projects, visit Lat66.com today. Savvy investors looking for ASX-listed companies with disciplined capital management and significant upside potential should explore their full portfolio and development strategy.
