THE BOURSE WHISPERER: Gateway Mining (ASX: GML) has entered into a tenement sale agreement for the sale of the company’s Edjudina project Exploration Licences in the Laverton Region of Western Australia.
Gateway Mining explained the divestment is part of the company’s strategy of extracting value from its portfolio of non-core exploration assets while maintaining a strong focus on gold exploration and development at its 100 per cent-owned Gidgee gold project.
Through a wholly-owned subsidiary company, Gateway has entered into a conditional tenement sale agreement with Syndicated Metals (ASX: SMD), under which SMD has agreed to acquire an 80 per cent interest in tenements E39/1765, E39/1882, E31/1150 and E31/1134.
The transaction is subject to SMD conducting due diligence in respect of the tenements to its reasonable satisfaction, a condition that must be satisfied or waived by 30 November 2019.
As consideration, SMD will provide Gateway $250,000 that could be paid in up to $200,000 worth of SMD shares.
The deal also involves the grant of a 1.5 per cent gross revenue royalty over the Tenements, payable after the first 200,000 ounces of gold or equivalent mineral product has been recovered.
Gateway’s subsidiary’s remaining 20 per cent interest in the tenements will be free-carried until such a time as a decision to mine is declared, and the parties have agreed to enter into a Joint Venture.
“Syndicated is a well-established ASX-listed explorer with an experienced corporate and technical team with whom we have an existing strong relationship,” Gateway Mining non-executive chairman Trent Franklin said in the company’s announcement to the Australian Securities Exchange.
“The transaction crystallises value, including cash, from the divestment of this non-core project, while preserving exposure for our shareholders to future upside from exploration success through a future production royalty, a free-carried 20 per cent interest and, potentially, shares in Syndicated Metals.”