JOHANNESBURG (miningweekly.com) – Gold and lithium company Kidman Resources has reached a binding agreement to sell its Burbanks gold mine, in Western Australia, to emerging gold miner Resources and Energy Group for A$4.5-million.
The ASX-listed company agreed to pay A$2.5-million by way of a convertible note and A$2-million in cash for the Burbanks mine, which Kidman placed on care and maintenance in August to focus its resources on the Mt Holland gold and lithium projects near Southern Cross.
The purchase of the Burbanks mine offers Resources and Energy Group the opportunity to double its gold resources at an “attractive price and on favourable terms”.
“The Burbanks acquisition is expected to achieve our dual goals of increasing the company’s resource base and delivering near-term, cash flow positive projects,” said Resources and Energy Group CEO Richard Poole.
Kidman previously announced that Burbanks, near Coolgardie, has a gold resource of 99 000 oz at 5.6 g/t. Prior to 2015, the Burbanks mine had historic production of 366 300 oz at an average grade of 13.9 g/t from openpit and underground sources.
The Burbanks sale and purchase is subject to or conditional upon satisfaction of the completion of due diligence, the parties entering into a formal agreement, the parties obtaining any regulatory or shareholders approval, Resources and Energy obtaining shareholder approval for any other element necessary for the transaction, and third-party consents or waivers necessary to give effect to the transaction.