PERTH (miningweekly.com) – Gold miner Millennium Minerals has agreed to divest of its Beatons Creek tenements, in Western Australia, in a deal valued at A$3.8-million.

The tenements included three mining leases, and were previously the subject of a farm-in agreement with Novo Resources Corporation, under which that company had the right to earn a 70% interest in the project area by completing a bankable feasibility study by August next year.

Millennium had now agreed to sell the tenements to Novo for A$3.8-million.

The Foreign Investment Review Board had already given its approval for the transaction, and once Millennium’s senior lenders had given their consent, the transaction would be completed.

The Beatons Creek project area was estimated to host an inferred resource of 8.9-million tonnes, grading 1.47 g/t gold for 421 000 oz of gold.

Millennium told shareholders on Friday that the proceeds from the transaction would be put towards reducing the company’s debt obligations, and to provide additional working capital.

Millennium had agreed with its senior lenders to make repayments of A$4.4-million by the end of March, bringing the total repayments for the first quarter to A$6.3-million. A further A$3.75-million in debts would be repaid during the second quarter, reducing the company’s debt to A$11.4-million, with the balance maturing at the end of May next year.

Meanwhile, Millennium’s major shareholder, IMC Group, had agreed to provide a A$3.8-million bridge funding facility for the March senior debt repayment, in the event that the Beatons Creek sale proceeds were not received in time.

In addition, IMC would provide an additional A$1.2-million short-term standby facility, providing Millennium with some flexibility as it continued to reduce its outstanding debt, as well as operating costs, and considered the future potential and further development of its Nullagine goldfields.

In return for the funding, IMC would be granted a further six-million options to acquire fully paid ordinary shares in Millennium, and subject to shareholder approval, would be granted the right to convert any outstanding balance of the bridge facility and standby facility into ordinary shares in the company.