PERTH (miningweekly.com) – ASX-listed International Goldfields and Fraser Range Resources have abandoned plans to sell the Plumridge gold project, in Western Australia, in lieu of a farm-in agreement.

The two companies took the mutual decision to cancel the sales agreement over the Plumridge project after it became apparent that Fraser Range would not be able to complete the transaction, owing to the company’s inability to raise the required funds.

Fraser Range said that, given the current capital market conditions and despite numerous informal discussions with potential investors, the company had been unable to secure the required A$4-million.

“The terms under the share sale agreements were agreed in different market conditions from those in which the company finds itself today. The company has made a number of attempts to renegotiate the agreed terms with International Goldfields; however, they have proved to be unsuccessful,” Fraser Range said.

Instead, the two companies have entered into a farm-in agreement that would see Fraser Range spend some A$1-million over the next 18 months, to secure a 60% shareholding in the Plumridge project.

International Goldfields would retain a significant working interest in the tenements, post the farm-in period, and would be free carried on the project until the 60% interest was earned.

“As a board, we have at all times been cognisant that the original sale agreement relied on an equity raising that in this market was going to be difficult, so in recent weeks, we have been negotiating with other parties in relation to an alternate transaction on this asset,” said International Goldfields MD Travis Schwertfeger.

He noted that the farm-in agreement represented the culmination of these negotiations, and in the board’s view, provided International Goldfields with continuing exposure to the Plumridge gold project, with a very real opportunity to monetize the remaining working interest, moving forward.

The Plumridge project is hosted in the Albany-Fraser Belt, which also hosts both the five-million-ounce Tropicana gold project, and the recent Nova nickel discovery.