Black Fire Minerals has signed an option and sale agreement with Parmelia Resources over its 60% stake in Mystique gold project, located in the Albany-Fraser Range region of Western Australia.
Mystique gold project, also known as E28/1915, is located in the Proterozoic Albany-Fraser Belt that has a gold prospectivity has with a low exploration maturity.
Black Fire's joint venture partner, Entrée Gold, has also agreed to divest its 40% interest in E28/1915 to Parmelia, on the same terms.
Under the terms of the deal, both Black Fire and Entrée Gold granted a six month option period to Parmelia to conduct due diligence over the tenement.
As an option fee, Parmelia has agreed to pay $12,957 to cover this year's annual Department of Mines and Petroleum (DMP) licence fee.
Upon completion of the option period, the company will issue up to 12 million fully paid ordinary shares in Parmelia at a deemed price of 2.5 cents per share for deemed total consideration of $300,000, to either withdraw from the agreement or elect to proceed with the acquisition.
If Parmelia fails to issue the full 12 million shares, then the shortfall will be met by a cash contribution for a combined cash and scrip consideration of $300,000.
The consideration will be divided proportionately between Black Fire and Entrée Gold with 60% and 40%, respectively.
Black Fire believes that the disposal of its stake in the project is in the interests of shareholders.
The disposal is also expected to better position the company to focus on its interest in the Pilot Mountain Tungsten Project in Nevada, US.
The Mystique project is centred on a substantial historic gold soil anomaly, defined before the discovery of Tropicana and that has been ineffectively drill tested to date.