PERTH (miningweekly.com) – ASX-listed Kalamazoo Resources has struck a A$7-million deal with privately held Adaman Resources to divest of its Snake Well gold project, in Western Australia.
Kalamazoo will maintain a 2.5% net smelter royalty on any base metals mine at the project area, the company said on Wednesday.
“The sale of the Snake Well gold project is an excellent result that will enable Kalamazoo to fully fund and accelerate its initial exploration and drilling programmes at Wattle Gully and in the Pilbara over the next two years,” said chairperson Luke Reinehr.
“Snake Well has been a wonderful initial project for us with its very successful pit and now provides the opportunity to generate further cash for our next stage of growth.”
Snake Well has a mineral resource inventory of 1.79-million tonnes, grading 2.45 g/t gold for 141 000 oz of gold.
The A$7-million sale proceeds will be paid progressively over the next 24 months and A$1.5-million in cash will be paid to Kalamazoo before the end of the year, with the sale subject to governmental consent.
The transaction also allowed Kalamazoo to engage Adaman to provide up to A$4-million of drilling services, deducted from the sale proceeds, at the Wattle Gully gold project, which if exercised will further fast-track the drilling programme, Kalamazoo said.