Breakaway continues WA asset sale

THE BOURSE WHISPERER: Breakaway Resources (ASX:BRW) has continued its divestiture of non-core assets having reached agreement to sell its Spargos Reward project in the Kambalda region of Western Australia to South Australia-based minerals explorer Mithril Resources (ASX:MTH) for $200,000 in cash.

The Spargos Reward tenements form part of Breakaway’s Kambalda West project, located south of Coolgardie on the Coolgardie-Esperance Highway.


Spargos tenements locations. Source: Company announcement


The sale involves nine tenements encompassing Prospecting Licences 15/4876 – P15/4883 and 15/4866.

It excludes the Nickel Rights over the tenements, which will be retained by Breakaway, and is conditional on completion of due diligence within 30 days and successful renewal of the tenements by Breakaway before their expiry on 22 September 2012.

The company has also reached agreement with Agnew Gold Mining Company (AGMC) to close out the mining rights arrangements in respect of the Vivien and Miranda tenements in Western Australia, located south of  Cosmos-Prospero nickel complex of Jubilee Mines and north-west of Breakaway’s Wildara project.

The settlement of this deal involves Breakaway transferring four mining tenements M36/166 – M36/168 and M36/123 to AGMC, in return for a reduced liability in Breakaway’s share of rates and taxes associated with the cost of maintaining the Vivien and Miranda tenements in good standing.
Breakaway said the divestment of these tenements is consistent with its focus on the continued exploration, evaluation and development of the company’s 100 per cent-owned Eloise copper-gold exploration project in the Cloncurry District of North Queensland, including the Sandy Creek project, where a maiden JORC resource estimate is expected to be announced soon.

The proceeds from the sale of the Spargos Reward project will strengthen the company’s working capital position.

The deal comes on the back of the deal Breakaway recently struck with leading Australian copper producer Sandfire Resources (ASX:SFR), which also involved a farm-in joint venture for the Broader Altia project in northwest Queensland.

“The sale proceeds, in conjunction with the cash injection from Sandfire’s recent strategic investment, will strengthen our cash position, enabling us to continue to progress our North Queensland assets to the next level,” Breakaway Resources managing director Victor Rajasooriar said in the company’s announcement to the Australian Securities Exchange.

Breakaway has been in the process of reviewing and evaluating its Western Australian nickel and gold portfolio.

In February this year the company divested 10 West Kambalda tenements to Ramelius Resources (ASX:RMS).

The company said the sale of the Spargos Reward tenements and the withdrawal from the Miranda joint venture were both consistent with its focus on its copper-gold assets in North Queensland.