ASX-listed mining and exploration company Beacon Minerals has signed a binding deal to acquire the Mt Dimer tenements in Western Australia from Aurumin.
The move is part of Beacon’s plan to expand mine life at its Jaurdi gold project in Coolgardie by purchasing projects with mine reserves.
The project is said to have “significant” strategic value, as it comprises known resources.
The company plans to use its Jaurdi processing plant and other mining infrastructure to achieve Mt Dimer’s full potential.
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Beacon will pay A$3m ($1.9m) in cash for a 100% interest in the Mt Dimer tenements, upon closing.
It will also pay a 2% net smelter royalty (NSR) on gold recovered from the project exceeding 12,000oz, along with a 2% NSR on all other minerals.
Additionally, it will invest A$500,000 upfront to acquire shares in Aurumin, at A$0.025 each.
Beacon has already carried out the due diligence process for the deal, which remains subject to other conditions such as regulatory and ASX clearances.
It will utilise existing cash reserves to finance the transaction.
The Mt Dimer project tenements are located 140km from the town of Coolgardie. It was originally discovered in the late 1980s by WMC, while the mining was conducted by Tectonic Resources in the mid-1990s.
Historically, Mt Dimer produced more than 125,000oz of gold, along with 600,000 tonnes mined from six open pits and one underground at 6.4 grams per tonne (g/t).
Exploration conducted by Aurumin in 2021 showed high-grade mineralisation at 4m with 49g/t gold (Au), including 1m at 153g/t Au.
The region around Mt Dimer has been found to contain iron ore mineralisation with banded iron formation units.
Last year, Beacon bought the Geko tenements, 15km from its Jaurdi Mill. This was preceded by its purchase of the MacPhersons Reward Project, located 45km from the Jaurdi mill, in August 2021.