Intermin Resources reached an agreement with Kingwest Resources to divest its Menzies and Goongarrie gold projects for a total consideration of AU$8 million.
The projects, located 80 to 130 kilometres north of Kalgoorlie-Boulder in Western Australia, comprises 38 mining, prospecting and exploration licenses with a current JORC resource of 195,000 ounces. Under the agreement, Kingwest will pay AU$3.375 million in cash and AU$4.625 million in Kingwest shares.
Intermin will become a substantial shareholder in Kingwest with Board representation in a non-executive capacity and will have a right to process or purchase any gold bearing ore from the sale tenements under standard commercial terms. The transaction is subject to Kingwest completing a AU$4 million capital raising and other standard conditions customary for a transaction of this nature.
Intermin remains fully focussed on its core projects in the Kalgoorlie and Coolgardie regions, completing the consolidated Feasibility Study and advancing mine development and production plans. The divestment to a well credentialed and focussed exploration company is line with our strategy of monetising assets to assist in funding future growth plans while maintaining exposure and upside. The payment structure enables Kingwest to fund exploration while providing cash and shares to Intermin broadly aligned with the proposed payment structure for the potential Coolgardie Gold Project acquisition.
Commenting on the Menzies/Goongarrie divestment, Managing Director Mr Jon Price said that Intermin’s core focus is firmly set on developing a standalone gold project in the Kalgoorlie and Coolgardie regions.
“This divestment supports this objective while retaining exposure to both Menzies/Goongarrie and Kingwest’s current gold projects in the north-eastern Goldfields,” said Mr Price.
“The deal is another step in Intermin’s strategy of monetising assets through mine development or generating value through the divestment of lower priority projects to support future growth plans and minimising shareholder dilution wherever possible.”
On settlement it is expected that Intermin will hold approximately 19.9 per cent of the total issued capital in Kingwest. Subject to ASX granting Kingwest a waiver from the requirements of ASX Listing Rule 6.18, Intermin will have the right to participate in any offer of securities in order to maintain their ownership interest. The acquisition also gives Intermin a subordinated priority first right to treat ore mined from the projects.