PERTH (miningweekly.com) – Gold junior Gascoyne Resources has struck a A$4.75-million deal with fellow listed Capricorn Metals to divest of its noncore Mumbakine Well project, in the Pilbara.

Mumbakine Well lies immediately adjacent to the Bibra deposit that hosts Capricorn’s recently commissioned Karlawinda gold project, located approximately 65 km from the township of Newman in Western Australia.

Under the terms of the agreement, Capricorn will pay Gascoyne A$1.25-million upon completion of the transfer of the exploration licence and grant a 0.5% net smelter royalty on all gold produced from the project.

In addition, Capricorn has agreed to make contingent deferred payments of A$1.5-million upon the announcement of a Joint Ore Reserves Committee-compliant mineral resource estimate in excess of 200 000 oz of gold, representing a minimum of 6.55-million tonnes at a minimum grade of 0.95 g/t gold, and A$2-million on the decision to start commercial mining activities on the project.

The consideration would be payable in either cash or Capricorn shares.

“We are pleased to have reached agreement with Capricorn to divest one of our non-Murchison assets in a transaction that will crystallise significant value for our shareholders while retaining exposure to future upside from resource development and production at Mumbakine Well,” said Gascoyne MD and CEO Simon Lawson.

“This is a pleasing first outcome from the ongoing strategic review of our noncore assets. It simplifies our portfolio and reinforces our strategic focus on the jewel in our crown – our Murchison assets including the more than 2.5-million-tonne-a-year plant and resources at Dalgaranga.

“The outstanding exploration success we have been enjoying at Dalgaranga has revealed the significant short-term value and upside that is available to the company by discovering and developing new resources in the shadow of the processing facility. This combined with the strong mining and processing performance seen over the past few months has put Gascoyne in a strong position for the future.”

Capricorn executive chairperson Mark Clark said that the acquisition of the prospective Mumbakine Well project, located only 10 km from the Karlawinda processing plant provides Capricorn with an outstanding opportunity to add satellite resources and ultimately mill feed to the Karlawinda gold project.