PERTH (miningweekly.com) – Junior Alto Metals has reached an agreement with fellow-listed Gateway Mining to acquire an exploration licence that is contiguous with its own Sandstone gold project tenements in Western Australia.

Under the terms of the agreement, Alto will acquire full interest in exploration tenement E57/1108 by issuing Gateway with A$50 000 worth of Alto shares.

Gateway will retain a 1% net smelter royalty over the tenement area, however, Alto would have the right to extinguish this by paying Gateway A$2.5-million at a decision to mine. Alto would also retain pre-emptive rights in relation to the net smelter royalty.

Alto MD Matthew Bowles told shareholders on Monday that the acquisition further consolidates the company’s ground position, increasing its overall footprint to more than 900 km², which covers the highly prospective and under-explored Sandstone greenstone belt.

“We currently have an aggressive reverse circulation drilling programme under way along the Lords Corridor, with a second rig arriving in mid-February to accelerate drilling at Lord Henry, Lord Nelson and a number of other targets.

“With recent results from a major step-out hole highlighting another new mineralised zone along the Lords Corridor, we are really excited about the potential that is starting to emerge at our Sandstone gold project.”

Gateway MD Mark Cossom told shareholders that the agreement to divest of the exploration tenement was consistent with the company’s continued focus on unlocking the potential of large-scale gold systems at the Gidgee gold project.

“The transaction crystalises value from the divestment of this non-core tenement, while preserving exposure for our shareholders to further upside from exploration success through a future production royalty and shares in Alto. The divestment allows us to continue to focus our resources on our flagship Gidgee project which we are really excited about.”