Duketon Mining has completed a binding sale agreement to sell a package of gold tenements from its Duketon Project to Regis Resources for A$25m ($16.8m) in cash.

The gold tenements package is located in the North Eastern Goldfields of Western Australia.

Duketon retains nickel rights over five tenements, which include mining licenses E38/2866, E38/2805, E38/2916, E38/2834 and E38/2666.

The company will retain 100% ownership of mining licence M38/1252 containing 71,000t of nickel resources.

Under the terms of the agreement, Regis will gain gold rights over tenement M38/1252.

Duketon will receive A$20m ($13.4m) in cash from Regis, with a further A$2.5m ($1.6m) payable upon the achievement of mineral resources higher than 250,000oz.

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A further A$2.5m ($1.6m) will be paid after the first commercial gold production or the mining of more than 5,000oz of gold from the Petra deposit.

Duketon Mining managing director Stuart Fogarty said: “Realising the nickel potential of the region was the primary objective of the company at the IPO and has always remained a significant value driver for shareholders. This deal significantly reduces our ongoing tenement holding costs.

“Outside of M38/1252 in the areas of nickel rights, we have zero holding cost but retain 100% access to explore for nickel and in the event of a discovery establish mining operations.

“This allows us to be in a unique position of being able to execute our exploration programmes without being driven by the underlying tenement expenditure conditions.”

The deal enables Duketon to focus on a work programme, which includes detailed geochemistry, geophysics and drilling study to test and identify potential nickel targets.