Horizon Minerals has agreed to buy the remaining 50% of the high-grade Penny’s Find gold project in Western Australia from Labyrinth Resources.

The consideration includes $356,206 (A$500,000) in cash payment and $178,103 (A$250,000) in Horizon shares.

Additionally, Horizon will make a series of smaller payments including net smelter royalties.

Earlier in the year, a joint venture agreement was signed between Horizon and Labyrinth Resources, formerly known as Orminex.

The joint venture partners completed a series of reverse circulation (RC) and diamond drill programmes and subsequently updated mineral resource estimate in July for the Penny’s Find deposit.

Located 50km northeast of Kalgoorlie, the Penny’s Find deposit comprises 250,000 tonnes grading a 5.22 grams per tonne gold for 42,000 ounces of gold.

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By GlobalData

The sale follows completion of Labyrinth’s comprehensive review of its portfolio as a result of the acquisition of two gold projects in the prolific Abitibi Greenstone Belt, Canada.

Upon completion of the sale, Labyrinth intends to continue to focus on exploration drilling at the gold projects in Quebec.

It will also continue geological assessment works of the Comet Vale and Golden Lode projects in Western Australia.

Labyrinth Resources CEO Matt Nixon said: “The sale of Labyrinth’s 50% interest in Penny’s Find to joint venture partner Horizon delivers a positive outcome for both parties and, most importantly, for shareholders, aligning with the strategic focus of the Company to rapidly explore and grow the resource base of the exciting Labyrinthe and Denain gold projects in Canada.

“The funds received from the sale will be utilised for working capital requirements and we are pleased to maintain an indirect interest in the future value of Penny’s Find through the equity position in Horizon.”

The transaction is subject to regulatory clearance.

Upon deal completion, Black Mountain will assume all future deferred payments, obligations and royalties of the project.

Proceeds from the sale will be used by Labyrinth as additional working capital for exploration and future growth.

Earlier this year, Horizon Minerals agreed to acquire three gold projects in Australia from Aurenne Group.