GBM Resources has announced a conditional term sheet with Olary Gold Mines for the sale of its White Dam gold-copper heap leach project in Australia.

The White Dam Gold Operation is situated in South Australia, around 80km south-west of Broken Hill.

It is a heap leach project and has produced around 175,000oz of gold since 2010, according to the company website.

The deal includes a 100% interest transfer in GBM’s subsidiary Millstream Resources, which holds the White Dam assets.

Under the terms of the agreement, GBM will receive A$2.95m in cash and a 1.5% NSR from Olary.

The payment structure is set, with A$950,000 due before 31 July 2024 and two additional A$1m payments to follow in 12 and 24 months post-completion.

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The NSR will be paid quarterly in arrears for all gold and silver production at White Dam, capped at a maximum of A$2.5m.

Olary is also required to contribute a minimum of A$200,000 in working capital to Millstream by 31 July 2024.

GBM has granted Olary an exclusivity period until 31 July 2024, during which both parties will negotiate further agreements related to management and technical support.

A non-refundable deposit of A$50,000 has been paid by Olary to GBM.

Completion of the sale is contingent upon several conditions, including Olary securing at least A$2m in funding during the exclusivity period, potential approval from GBM shareholders and obtaining all necessary consents for the sale.

GBM will continue to provide management support and security over the White Dam fixed plant until full payment is received.

GBM managing director and CEO Peter Rohner said: “GBM has continued to look to realise value from the sale of non-core assets for GBM’s shareholders.

“GBM’s focus continues to be on the prospective Drummond Basin where large high-grade epithermal gold deposits exist and where it has expanded JORC resources to 1.84moz [million ounces] of gold, including a farm-in agreement with Newmont on the Mt Coolon Project.”