S2 Resources Sell WA Gold Projects to Westgold

THE BOURSE WHISPERER: S2 Resources (ASX: S2R) executed a binding Heads of Agreement with Westgold Resources (ASX: WGX) to sell its Western Australia gold project interests.

S2 Resources will sell Westgold its interest in the Polar Bear project (100%), Eundynie Joint Venture (80%) and the Norcott project (100%) via the sale of all of the shares in S2’s wholly owned subsidiary Polar Metals Pty Ltd.

Under the terms of the Agreement, S2 will receive $3 million cash plus four million Westgold shares.

Assuming a share price of $1.50 per share, the total consideration will be $9 million and S2 will sign a voluntary restriction agreement in respect of the Westgold shares for a period of six months from settlement.

S2 Resources said the sale add strength to its balance sheet with cash and investments now totalling approximately $25 million, which the company said enhances its capacity to focus time and funds on the opportunities presented in its overseas exploration activities.

It will also retain exposure to the upside of Polar Bear’s nickel prospectivity, which includes the Taipan and Halls Knoll nickel prospects discovered by S2’s precursor, Sirius Resources.

S2’s WA gold projects include the Baloo gold deposit, which despite being too small for S2 to develop as a stand-alone mining operation, is considered to be a good strategic fit for Westgold, which owns the Higginsville gold operation located within 10 kilometres of Baloo.

“We are pleased to have executed this agreement, which is part of our strategy to focus on those opportunities that we believe have the best potential to deliver a significant discovery, whilst minimizing the need for external funding and keeping our capital structure as tight as possible so that in the event of success our shareholders retain maximum leverage to it.

“We are also pleased to become a shareholder of Westgold and look forward to Westgold progressing the development and exploration of the WA gold projects.”

 

Email: admin@s2resources.com.au

Website: www.s2resources.com.au