Australia's Mineral Resources (MinRes) (MIN.AX) said on Thursday it will sell the entirety of two exploration permits in Perth basin and form joint ventures with Hancock over remaining onshore exploration lands around the area for up to A$1.13 billion ($743.09 million).
Shares of the diversified miner gained as much 16.4% to A$41.98 in early trade, their strongest trading session since mid-September.
On completion, billionaire Gina Rinehart's Hancock will acquire two permits for Perth basin and receive a 50% stake in MinRes' remaining permits in Perth and Carnarvon Basin. MinRes will retain the other half and continue as operator.
Hancock will pay the total deal value in cash, which includes an upfront consideration of A$804 million for the permits and additional purchase price adjustments of A$327 million.
The deal follows MinRes' announcement last month saying that the diversified miner is "reviewing development and partnering opportunities" related to the two permits and will assess joint venture partnerships as well as full or partial sale options as a part of the review.
Separately, MinRes posted an 11% sequential rise in its mining services quarterly production volumes and said fiscal 2025 mining services production will be weighted to the second half of the year, aligned with the ramp-up of its Onslow Iron Project.
Citi analysts said in a note MinRes' quarterly production update was overshadowed by the deal.
MinRes board is currently investigating the tax history of its billionaire founder and managing director Chris Ellison and is due to report its findings next week.
"We expect a positive market reaction on news of the gas sell-down, which should alleviate balance sheet concerns. That said, we think some investors will sit on the sidelines given the outcomes of the MD investigation are due by Monday," Citi said.
($1 = 1.5207 Australian dollars)
