OZ Minerals has signed a sale agreement for its Cambodian gold assets, netting the equivalent of Aus$17.8 million in cash, shares and options. Western Australia-based gold explorer Renaissance Minerals has agreed to the purchase with possible future payments of a further Aus$22.5 million once certain milestones are achieved.
“OZ Minerals sought to develop and operate a mid-tier gold mine in Cambodia and to this end took its Cambodian interests from a grassroots project to an identified gold resource,” says the company’s managing director Terry Burgess.
“However after review, we have concluded that this project does not fit within OZ Minerals’ strategy with regard to scale in relation to the commodity and our overall preference for mid-tier copper projects. We are pleased to be selling these assets to a group which has strong ambitions to see them developed.”
The terms of the sale include an initial Aus$1 million dollar cash payment, followed by an Aus$6.8 million payment on the completion of the agreement scheduled in April, 3 million Renaissance options, Aus$5 million 12 months after completion and Aus$22.5 million in cash contingencies payable upon a gold resource being defined and after the first gold pour.
Oz Minerals started exploration in northeast Cambodia in 2006 with four projects in the Mondulkiri province. The most advanced of these projects is Okvau where a JORC-compliant resource of 12.6 million tonnes @ 1.8 grams/tonne gold for 729,000 ounces of contained gold was defined last year.
The Okvau project was considered the company’s foundation asset, and three other prospects - Oput, Granite Hill and O Khlek Khlok - were explored nearby. These projects are included in the sale agreement.
Renaissance Minerals’ managing director Justin Tremain says, “This is a company making acquisition for Renaissance. It is a unique opportunity to be able to secure a project with a 729,000 ounce gold resource defined within a single deposit along with multiple drill ready prospects that offer exceptional potential in an emerging new gold district.”
Terry Burgess says OZ Minerals looks forward to working with Renaissance in completing the transaction. The company has a $70 million exploration budget at its flagship Prominent Hill copper-gold project in South Australia.