THE BOURSE WHISPERER: David Hutton-led Mithril Resources (ASX: MTH) has executed a Tenement Sale Agreement with Breakaway Resources (ASX: BRW) for the purchase of the Spargos Reward gold project for $200,000 in cash.
Hutton was previously managing director of Breakaway Resources.
The Spargos Reward gold project is located 25 kilometres west of Kambalda, and 16km north along strike from the Wattle Dam gold mine of Ramelius Resources (ASX: RMS) in the Eastern Goldfields of Western Australia.
Spargos Reward location plan. Source: Company announcement
The acquisition has come following the completion of due diligence, and the renewal of the project tenements.
The project comprises the high-grade Spargos Reward gold mine, which historically produced approximately 29,257 ounces at eight grams per tonne gold and the surrounding 15 square kilometres of tenements (Prospecting Licences 15/4876 to 4883 and 15/4886).
“The strategically located project offers significant potential for the discovery of economic gold mineralisation and the company has now received statutory approval to commence exploration activities including drilling,” Mithril Resources said in its ASX announcement.
The sale excludes the project’s nickel rights, which will be retained by Breakaway Resources.
The deal is conditional upon the execution of a Deed of Assignment and Assumption in respect of an existing three per cent royalty of all gold recovered from PL 15/4876 to 4883 and a Royalty Deed in respect of an equivalent royalty on PL 15/4886.
Mithril said it expects to complete the acquisition by mid-November 2012 and commence its exploration activities soon after.