Forrestania Resources has agreed to acquire the Aurumin Mt Palmer, Aurumin Johnson Range and Aurumin Mt Dimer subsidiaries from Newcam Minerals in a move to take full ownership of the Mt Palmer gold project in Western Australia (WA).
This deal will be executed through the issuance of nearly 37.9 million ordinary shares in Forrestania at A$0.475 per share, totalling A$18m ($12.5m).
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Mt Palmer is located around 15km east of Marvel Loch in the Shire of Yilgarn. Historically, it has been mined using both open-pit and underground methods, producing approximately 158,000oz of gold at an average grade of 15.9 grams per tonne (g/t).
Aurumin Mt Palmer holds a 20% interest in one mining lease and three exploration licences near Forrestania’s Southern Cross Hub. The remaining 80% is already held by Forrestania following the takeover of Kula Gold.
In addition to the shares for Aurumin Mt Palmer, Forrestania will issue nearly 13 million shares to acquire Aurumin Johnson Range and Aurumin Mt Dimer.
The Mt Dimer Hub lies within the Marda-Diemals Greenstone Belt of the Southern Cross Domain in the Yilgarn Craton. This domain comprises greenstone belts flanked by granite formations and includes the Mt Dimer, Johnson Range and Mt Jackson project areas.
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By GlobalDataThe agreements include milestone payments linked to future mineral resource estimates.
The transaction involves tenements such as mining lease M77/406 and exploration licences E77/2210, E77/2423 and E77/2668 in the Southern Cross Hub, as well as various tenements in the Mt Dimer Hub including mining leases M77/1263 and exploration licences E16/489 and E77/2560.
The acquisitions will be finalised upon full payment using the issued shares.
Forrestania technical director Brett Hodgins said: “This ability to acquire the remaining 20% interest in the Mt Palmer project allows FRS [Forrestania Resources] to expedite the project development with FRS shareholders now the sole beneficiaries. The Mt Palmer project will be a key ore source as FRS moves towards gold production from the Lake Johnston processing facility.
“Importantly, further consolidation of tenure within the Mt Dimer Hub, the transaction structure aligns consideration with exploration and acquisition success while preserving capital, which can be assigned to advancing Forrestania’s production ambitions across our portfolio of West Australian gold assets.”
Last month, Forrestania initiated a diamond drilling programme at its Forrestania Hub in WA, specifically targeting the Lady Lila Project.
