PERTH (miningweekly.com) – Junior Kidman Resources has inked a binding heads of agreement with fellow-listed Metals X, to divest of its Gunga West gold project, in Western Australia, for A$2.5-million.
The transaction would comprise a A$1.5-million cash payment, and further payments of A$500 000 each upon Gunga West producing 10 000 oz and 30 000 oz of gold.
Kidman said on Thursday that despite the Gunga West project hosting a resource of 73 000 oz, grading at 1.7 g/t gold, the company’s recent move to acquire the one-million-ounce Mt Holland gold field and the progress being made at the Burbanks mine, meant that Gunga West was effectively classified as a noncore asset for the company.
The proceeds from the Gunga West sale would be combined with Kidman’s recent A$6.5-million capital raise, allowing the company to pursue its production strategies at Burbanks and Mt Holland.
Kidman was aiming to lift production at the Burbanks mine, which poured its first gold in September last year.
The company also recently entered into a nonbinding heads of agreement to acquire the Mt Holland gold field for A$3.5-million.
Meanwhile, Metals X said that production from the Gunga West gold deposit would provide supplementary feed to its Jubilee mill, which was about 30 km away, in the coming years.
The transaction was subject to Foreign Investment Review Board and Ministerial approval.