Spartan Resources will sell its Glenburgh and Egerton gold projects to Benz Mining Corp to focus on growing its flagship Dalgaranga gold project.
Glenburgh and Egerton are located approximately 300km north of Dalgaranga in the Murchison region of Western Australia. Both projects have a combined mineral resource estimate of 537,000 ounces of gold at 1.0 grams per tonne of gold.
As part of its strategic focus on continued high-grade resource growth at Dalgaranga, Spartan will sell Glenburgh and Egerton to Benz Mining, a Toronto-based gold exploration company.
“The Glenburgh and Egerton projects have undoubtedly suffered from a lack of attention within the Spartan Group in recent years as a result of the incredible success we have enjoyed at Dalgaranga,” Spartan interim executive chairman Simon Lawson said.
“As a result, they are considered non-core within our portfolio given our focus on continuing to rapidly add high-grade ounces and advancing Dalgaranga towards a production re-start decision.
“We are therefore pleased to have reached agreement with a funded and well-backed explorer in Benz Mining to give these assets a reinvigorated life.”
As per the binding agreement, Benz will pay up to $15.6 million for the two projects. The amount comprises $1 million in cash, $8.6 million in Benz CHESS depository instruments, and up to an additional $6 million in contingent payments.
Once the transaction is completed, Spartan will hold about 15 per cent in Benz and will be entitled to nominate a director to the board of Benz. Spartan is also expected to incur an approximate $17 million non-cash accounting impairment expense against the carrying value of Glenburgh and Egerton.
“The Spartan team is looking forward to staying involved in the exploration at the Glenburgh and Egerton projects and Nick Jolly – a key member of the Spartan geology team associated with the discovery of the Never Never and Pepper high-grade gold deposits – is the proposed Spartan nominee to the Benz board,” Lawson said.
“Spartan will also be providing additional technical support and assistance to Benz given our history with the asset and capitalising on the insights gained at Dalgaranga – where our team have successfully discovered high-grade gold deposits close to historic lower grade open pit deposits.”
The transaction is expected to be completed by December.
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