TSX-V- and ASX-listed Sarama Resources has completed the sale of its majority and controlling interest in its Laverton gold projects, in Western Australia, to ASX-listed Riedel Resources for A$3.2-million in cash and shares, while retaining significant exposure to their future success through its shareholding in the company.

Sarama will hold an initial 32% interest in Riedel, increasing to about 44% upon the achievement of certain performance milestones. Sarama’s interest in Riedel will be held through a wholly owned subsidiary.

As part of Sarama’s broader equity and capital management strategy, and to manage exposure to its arbitration claim while retaining exploration upside, Sarama completed a share sale agreement (SSA) with Riedel Resources to sell its Cosmo and Mt Venn projects in exchange for a combination of equity and the payment of certain project-related expenses.

The transaction has resulted in Sarama holding a significant equity interest in Riedel, which has been transformed into a well-funded, multi-project gold explorer with three projects across the Tier 1 jurisdictions of Western Australia and Arizona, in the US.

Additionally, Andrew Dinning was appointed as a nonexecutive director of Riedel upon execution of the SSA, and Paul Schmiede has been appointed CEO of Riedel. Jack Hamilton has been appointed to the role of special adviser-exploration with oversight over exploration activities on the three projects.

The company says it will retain the services of Schmiede and Hamilton as required to ensure continuity of the business, while Dinning will continue in his full-time role as executive chairperson.

Pursuant to the SSA, Riedel has acquired Sarama’s interest in the projects through the acquisition of a 100% interest in Sarama’s wholly-owned subsidiary, Yikarri Resources for consideration comprising equity in Riedel and payment of certain project-related expenses on Sarama’s behalf.

This includes the issuance of 150-million shares in Riedel to Sarama (or its nominee) at a deemed price of A$0.025 apiece; the issuance of 100-million performance rights in Riedel to Sarama (or its nominee) across four tranches vesting upon the achievement of certain exploration, mineral resource and share price milestones; and the payment of project-related costs that are incurred by Sarama, capped at A$300 000.

Shares received by Sarama will be held in escrow for a period of 12 months.

“We are very pleased to complete the sale of our Western Australian assets to Riedel while retaining significant exposure to their future success through our shareholding in the company. We believe the combined portfolio has considerable exploration potential and look forward to seeing these assets advanced under a dedicated and well-funded team,” says Dinning.

“The completion of this transaction is an important part of Sarama's strategy to minimise further dilution of the company's claim against the government of Burkina Faso, while ensuring the Laverton projects receive the dedicated focus and funding they require to unlock their full potential,” he adds.