High Peak Royalties (ASX:HPR) agreed to sell its subsidiary Torrens Energy (SA), which holds its South Australian geothermal assets, to natural resources firm Northstar Energy, according to a Thursday filing with the Australian bourse.

Consideration for the transaction includes the assumption by Northstar Energy of a royalty issued by Torrens Energy to the company and the issuance of 12.5 million completion shares in Northstar priced at AU$0.16 apiece, at a valuation of AU$2 million, subject to a two-tranche completion, the filing said.

The company also formed a formal partnership with Northstar Energy, committing to work with them and potentially participating in capital raising initiatives in the event of an initial public offering or similar liquidity event, per the filing.