Westgold Resources has signed a binding asset sale agreement to sell the Mt Henry-Selene gold project, located near Norseman in Western Australia (WA), to Alicanto Minerals for total of A$64.6m.
The project contains a gold resource of 900,000oz distributed across several deposits along a 16km stretch in the Southern Kalgoorlie terrane.
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The mineralisation remains open along strike and down-dip of each deposit, offering significant potential for rapid resource expansion and broader district-scale growth.
The Mt Henry project was last mined in 2019, and its current mineral resources are reported within pit shells, based on a gold price assumption of around A$2,169/oz.
With the gold price surpassing A$6,000/oz, there is substantial potential to expand these pit shells.
According to the terms of the agreement, Westgold will receive A$15m in cash and approximately 357.1 million Alicanto shares valued at A$19.6m upon completion of the transaction.
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By GlobalDataAn additional deferred payment of A$30m, payable in cash or shares, is contingent upon the achievement of agreed performance milestones, which will be issued as performance rights.
Westgold managing director and CEO Wayne Bramwell said: “The divestment of Mt Henry to Alicanto follows the recently announced spin-out of the company’s non-core Murchison projects to Valiant Gold. This transaction delivers Westgold shareholders an attractive mix of cash, exposure to project upside via a large strategic shareholding and deferred consideration payable on specific project milestones.
“Westgold is pleased to partner with Alicanto, whose board and management team are experienced and committed explorers and have a demonstrable record of rapidly advancing gold projects. Alicanto’s planned drilling investment provides a pathway for exploration success and potential future development, which can unlock additional value for all stakeholders.”
Mt Henry was initially acquired as a non-core asset through Westgold’s merger with Karora Resources and forms part of Westgold’s extensive 3,200km² tenement portfolio.
Bramwell added: “Westgold continues to progress discussions in relation to the potential sale of its Peak Hill and Chalice gold assets following strong inbound interest. The company will continue to inform the market of material developments in accordance with its continuous disclosure obligations.”
Upon completion of the transaction, Westgold will become a 19.9% shareholder in Alicanto and have the right to nominate a representative to the Alicanto Board.
Argonaut served as the financial adviser and Thomson Geer as the legal adviser to Westgold for the transaction.
Earlier this month, Westgold restarted high-grade gold mining at the Great Fingall mine near Cue in WA, delivering the first production from this historic gold reef in more than 100 years.
