THE BOURSE WHISPERER: Resource and Investment (ASX: RNI) has reached an agreement with Montezuma Mining Company (ASX:MZM) for an option to acquire control of the Peak Hill gold project, located north of Meekatharra in Western Australia.
Peak Hill comprises mining leases and prospecting and exploration licences covering a total of 211 square kilometres, which contain JORC-compliant gold resources of more than 560,000 ounces in a series of historic open pits (based on 11.52 million tonnes at 1.51 grams per tonne gold).
Peak Hill adjoins leases within RNI’s 2,225sqkm Grosvenor project, which hosts JORC-compliant gold resources of 1.2 million ounces. This gives a combined gold inventory of more than 1.7 million ounces.
Location of RNI’s Grosvenor project and the Peak Hill gold project. Source: Company announcement
RNI is currently refurbishing the one million tonne per annum Grosvenor gold plant, which it said is scheduled to resume production in 2013.
“The Peak Hill deal is in line with RNI’s strategy of unlocking stranded gold deposits in the area as the company continues its gold and base metals exploration programs,” Resource and Investment said in its ASX announcement.
“RNI plans to review the Peak Hill gold resources to assess whether they may be suitable to include in the company’s long-term mining plan for the refurbished Grosvenor gold plant.”
Under the terms of the agreement RNI, through its wholly-owned subsidiary Grosvenor Gold, will pay Montezuma $100,000 for an option to acquire its wholly-owned subsidiary Peak Hill Metals.
Peak Hill Metals holds leases comprising the Peak Hill gold project. Approximately 547,000 ounces of the Peak Hill gold resources are attributable to Peak Hill Metals and are thus covered by the option with RNI.
Should Grosvenor Gold exercise the option to acquire Peak Hill Metals, the consideration to be paid to Montezuma will be $2.8 million, 8.4 million fully paid ordinary RNI shares and 2.1 million unlisted 75 cent RNI options exercisable within 3 years from the date of issue.
In addition, Grosvenor Gold will pay Montezuma a gross royalty of one per cent of all revenue received from the sale or disposal of ore from the Peak Hill project tenements to a limit of $1 million.