PERTH (miningweekly.com) – ASX-listed Westgold Resources has completed a share placement, raising A$23.4-million, while also announcing plans to divest of its non-core lithium royalties for A$15-million.
The company on Friday reported the placement of 26-million fully paid ordinary shares, priced at 90c each, to professional and institutional investors.
The company told shareholders that the placement replenished the working capital applied to the purchase and re-build of the underground mining contractor Australian Contract Mining, and left the company adequately funded to continue to grow its gold output from its Murchison operations, in Western Australia.
Meanwhile, as part of its strategy to concentrate on gold, Westgold has entered into a conditional letter of intent with SilverStream to divest of its non-core lithium royalties at the Mt Marion and Buldania lithium projects, for A$15-million.
The agreement allows for a 75-day exclusivity period to complete a due diligence.
At the end of the exclusivity period, SilverStream would pay Westgold A$7.5-million in immediate cash, with the company to receive two further tranches of A$3.75-million in either cash or SilverStream shares.
Westgold said on Friday that the company had been planning a demerger of all its lithium assets, however, following the receipt of the SilverStream proposal, the company has now decided that the sale of its lithium royalties was in the immediate best interest of shareholders.
The company will retain its lithium exploration and mining rights on the Hampton Locations adjacent to the Mt Marion lithium mine.