PERTH (miningweekly.com) – ASX-listed Westgold Resources has signed a A$50-million divestment deal over its Higginsville gold operation with TSX-listed RNC Minerals, which will result in the combination of the Higginsville and Beta Hunt mines.
Under the terms of the agreement, RNC would pay A$25-million in cash and a further A$25-million in shares for the Higginsville operations.
Under an option agreement, Westgold would be paid an immediate A$4-million from the A$25-million share payment as a non-refundable deposit for a 40-day exclusivity period to allow RNC to complete its due diligence and planning for a settlement.
Westgold MD Peter Cook told shareholders on Tuesday that the deal with RNC was a “sensible transaction”, and gave both RNC and Westgold solutions for their project needs.
“The addition of the bonanza grade gold discoveries and resource potential at Beta Hunt to the existing operations at Higginsville will provide enhanced gold output at lower costs, as well as security from ownership of substantial plant and infrastructure.
“Importantly the asset consolidation paints a bright picture for the future of the project and its employees.”
Higginsville has a 1.3-million-tonne-a-year carbon-in-pulp gold processing plant, a 300-person village, and includes the Trident underground mine. Mining at Higgensville is currently focused on the Mt Henry operation, which is replacing the Trident underground mine.
The Higgensville operation produced 8 299 oz of gold during the three months to December, selling 8 619 oz.
RNC’s Beta Hunt exploration project has delivered gold hits of up to 7 621 g/t of coarse gold, with the project currently estimated to host some 2.3-million tonnes of indicated and more than 2-million tonnes of inferred resources, for some 239 000 oz of indicated and 208 000 oz of inferred resource.
Cook said on Tuesday that with the divestment of the Higginsville operation, Westgold’s core focus would remain on its three remaining operations in the Murchison region, and on expanding their gold output.
The proposed transaction was subject to Foreign Investment Review Board approval, and TSX approval, if required.