Gateway Mining has closed the sale of its gold rights in the Montague East gold project in Western Australia (WA) to Brightstar Resources for A$14m ($9.6m).
As part of a transaction agreement announced on 1 August, Gateway has now received a A$5m cash consideration and A$7m of Brightstar shares.
A deferred A$2m of additional Brightstar shares is payable upon the achievement of commercial gold production at Montague East or the delineation of a Joint Ore Reserve Committee (JORC) mineral resource estimate on the tenements exceeding one million ounces (moz) of gold.
Following the sale, Gateway retains 100% of all other mineral rights in the tenements, as well as all legal and beneficial ownership of Montague West.
The 1,000km² Montague project is located within a 120km radius of six operational gold treatment facilities.
Gateway chairman Peter Langworthy commented: “We are crystallising significant value from our resource-level gold assets within the Eastern Montague project and we are excited to become a significant shareholder in Brightstar.”
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By GlobalData
The company will now focus on its systematic copper-nickel-platinum and gold exploration at Montague, including air core and reverse circulation drilling programmes. It is also exploring the project’s lithium potential with minerals targeting company SensOre.
Montague is located 70km north of the Sandstone Gold development owned by Alto Metals, which is currently undertaking a merger with Brightstar.
Acquiring Gateway’s gold rights is part of Brightstar’s near-term strategy to become a mid-tier gold producer in WA, as it has now added a further 9.6 million tonnes of gold to its mineral endowment. The company is planning a drilling campaign at Montague East in late October.
Brightstar’s managing director Alex Rovira stated: “With 2moz gold mineral resources situated on granted mining leases, combined with our low capex growth plans and near-term development and production expansion, Brightstar is well placed to maximise value of the portfolio in an all-time high gold price environment.”
