PERTH (miningweekly.com) – Minerals explorer Minotaur Exploration and its subsidiary Minotaur Gold Solutions on Monday entered into a sales and purchase agreement with fellow-listed Breakaway Resources to buy the Scotia project, in Western Australia (WA).

The Scotia project consists of 14 tenements and is prospective for both nickel and gold.

Under the terms of the agreement, Minotaur would acquire all the rights, other than gold, as well as the rights to no less than 20% of the gold deposits discovered on the tenements, for A$600 000 in cash.

The agreement was conditional on a due diligence and Ministerial approval, as well as Breakaway entering into a deed with nickel major Norilsk, releasing it from all its obligations under a clawback agreement, and converting its rights into a 2.5% net smelter royalty on nickel, copper and platinum-group elements.

Furthermore, the Scotia tenements were currently under a joint venture agreement with nearby Aphrodite Gold, which is earning up to an 80% interest in the project’s gold rights.

The purchase agreement between Minotaur and Breakaway was also conditional upon Aphrodite not exercising its pre-emptive right to purchase the remaining gold interest in the project.

Minotaur’s executive director Antonio Belperio said on Monday that the Scotia purchase was a foundation step in Minotaur’s assembly of mineral prospective ground in Western Australia.

He noted that the company was specifically attracted by the gold potential at Chameleon, and elsewhere on the tenements, as well as Chameleon's proximity to Aphrodite’s own gold project.

Meanwhile, Breakaway’s own MD Victor Rajasooriar said that the proposed sale of the Scotia project was consistent with the company’s focus on its flagship Eloise copper/gold project, in Queensland, and the Leinster gold project, in Western Australia.

“The sale follows an ongoing review of our noncore tenement holdings in Western Australia, including our extensive nickel portfolio, and represents a sensible rationalization of our asset base.”

Rajasooriar added that the proceeds from the sale would boost the company’s working capital position in a challenging market environment, and would enable Breakaway to continue to progress the upcoming exploration activities at its other projects.