PERTH (miningweekly.com) – Gold hopeful Gascoyne Resources has exercised its option to acquire the Egerton gold project, in Western Australia, from fellow-listed Exterra Resources.
The two companies signed an option agreement in May last year.
Under the exercise agreement, Exterra would receive some A$750 000 of Gascoyne shares, or 4.166-million shares, with 67% of these shares held in escrow for the next six months.
The balance of the shares, with a market value of A$247 000, would not be subject to escrow.
Exterra would also receive 500 000 Gascoyne options, exercisable at 25c each, within a three-year term.
Exterra told shareholders on Thursday that the transaction provided the company with the opportunity to dispose of its holding in Gascoyne, and provided additional cash reserves and the potential for further funds to support the Second Fortune gold project, which would require a A$5-million capital investment.
The junior said that it was currently in discussions with a number of groups regarding project finance or joint venture arrangements, which would allow for the development of Second Fortune’s underground mine in the near future.
The Egerton project includes the high-grade Hibernian deposit, which contains a resource of 116 400 t, grading 6.4 g/t gold for 24 000 oz of gold. The project lies on a granted mining lease.