Australian company Labyrinth Resources has finalised the sale of its Labyrinth and Denain gold projects in the Abitibi region of Quebec, Canada, for a cash consideration of $3.5m (A$5.23m).

This strategic move is part of the company’s shift towards enhancing shareholder value through the exploration and development of its Comet Vale tenement package in Western Australia.

The Canadian assets were acquired by Labyrinth in September 2021 as part of a project acquisition agreement with G.E.T.T. Gold (GETT).

To facilitate the sale, Labyrinth has now signed a sale and purchase agreement with Gold Projects WA, a special-purpose vehicle created specifically for this transaction.

Gold Projects WA is 51% owned by Carey Group Holdings, while the remaining 49% is held by Dubai-based precious metals trading company Erasano DMCC.

The agreement stipulates a $3.5m cash payment to Labyrinth Resources and a $175,000 cash deposit by Gold Projects WA.

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By GlobalData

Completion of the sale is contingent on several conditions precedent, which must be met or waived by 31 January 2024.

Completion of the deal is subject to obtaining all necessary regulatory and shareholder approvals. These include the consent from GETT to transfer the project acquisition agreement to Gold Projects WA, and the registration of Gold Projects WA as the holder of the Mining Rights.

Additionally, there should be no material adverse change concerning the projects, and all necessary consents must be obtained to novate or assign the royalty contracts to Gold Projects WA.

Furthermore, the Rocmec Hypothec must be discharged and removed by GETT, with Labyrinth providing evidence of this to Gold Projects WA.

The sale is a significant step for Labyrinth Resources as it refocuses its efforts on its promising assets in Western Australia.

Labyrinth CEO Jennifer Neild said: “The sale of the Canadian assets ensures Labyrinth is well placed to enter a new stage of exploration and growth in Western Australia.

“The cash injection into LRL provides significant optionality in the prolific WA Goldfields region that hosts the company’s 51%-owned Comet Vale project. We look forward to communicating Labyrinth’s strategic intent in the coming months.”