PERTH (miningweekly.com) – Gold miner Doray Minerals will divest of its Andy Well gold project, in Western Australia, to Canadian gold miner Galane Gold for A$10-million.

Under the terms of the binding sale and purchase agreement, Doray will be paid A$3-million in cash up-front, along with A$1-million worth of Galane shares. A further A$3-million in cash will be payable 12 months after the execution of the agreement, with the balance of A$3-million due 24 months after the execution of the agreement.

Doray said on Friday that the agreement with Galane eliminated the company’s care and maintenance cost at Andy Well, with the TSX-V-listed firm to assume the project’s rehabilitation liability.

“Andy Well has been a terrific asset for Doray and its shareholders and a key reason Doray was the ASX’s best performing initial public offering of 2010. The successful discovery, start-up and operation of Andy Well delivered significant value to Doray,” said MD Leigh Junk.

“With the company’s successful establishment of Deflector as a profitable foundation from which to drive shareholder value, this transaction with Galane provides us with a well-structured exit from Andy Well and the opportunity for the project to prosper once again under new ownership.”

Andy Well produced more than 300 000 oz of gold for Doray since first production in 2013, with the operation being placed on care and maintenance in 2017 on the back of a declining production profile and profit margin.

The project has a current mineral resource estimate of 322 000 oz, at 1.8 g/t gold.

In addition to the sales agreement, Doray has also reached a non-binding agreement with Galane over the Gnaweeda project, under which the Canadian firm would have the right to earn into the Gnaweeda project through staged expenditure commitments.

A binding farm-in and joint venture agreement for Gnaweeda is now being finalised.