Catalyst Metals will sell its Henty gold mine in Tasmania to Kaiser Reef in a bid to focus more on its Plutonic gold mine in Western Australia.
Catalyst originally acquired Henty in January 2021. The operation comprises an underground mine and carbon in leach processing plant with a 300,000-tonnes-per-annum (tpa) nameplate capacity.
Catalyst will now sell Henty to Kaiser Reef to give the operation the time needed to realise its upside.
The divestment will also provide Catalyst with a processing solution for its Four Eagles gold project in Victoria. The company will be granted with a 12-year option to buy a 50 per cent interest in the Maldon processing facility, a 200,000tpa processing plant located 100km south of Four Eagles.
“Catalyst believes focus is important,” Catalyst managing director and chief executive officer James Champion de Crespigny said.
“Eighteen months ago, Catalyst committed itself to Western Australia by consolidating the Plutonic gold belt. Henty’s operating nature means the time required for it to realise value and upside of Henty was costly.
“This transaction allows Catalyst to focus on Western Australia while still sharing in the upside that can come from a new, more focused, operating team.”
Kaiser Reef will purchase Henty for about $30 million. The gold producer will pay $15 million upfront, and $14 million in deferred gold consideration will be paid on the basis of 3000 gold ounces of future production.
Once the transaction has been completed, Catalyst will become a 19.99 per cent shareholder in Kaiser Reef. The company said this will allow Kaiser Reef to leverage its knowledge of Henty and provide exposure to Henty’s future value.
“The value proposition for Catalyst is compelling due to a novel transaction structure,” Champion de Crespigny said.
“Consideration is in two parts – more easily quantifiable cash and trailing payments and the harder to quantify equity in Kaiser and option over a Victorian mill.
“The equity interest is attractive in this gold price environment while the option to solve a processing problem in Victoria has, we think, considerable value to our shareholders on an asset that is not being valued by the broader market.”
Having achieved first stoping ore at Plutonic East earlier this month, Catalyst is shifting its project development activities to K2 and Trident, both of which are expected to come online in the next 12 months.
Catalyst is also ramping up its exploration efforts with 12 drill rigs now active across the Plutonic gold belt to complete a 320,000m drilling program.
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