GBM Resources has initiated the sale of the Mt Morgan gold-copper project in Queensland to Canadian-based Smartset Services to focus more attention on its Drummond Basin gold assets.
Pending approvals and Smartset’s capital raising, GBM will hope to dispose of a non-core asset (Mt Morgan) while retaining an interest in the prospect.
GBM managing director and chief executive officer Peter Rohner said this strategy was ideal for the company, as it looked to increase its focus on its flagship Drummond Basin gold assets.
“We are very pleased to have aligned our Mt Morgan gold-copper project with the proven skillset of the Smartset team,” Rohner said.
“This transaction allows us to accelerate the exploration and potential value unlock of the Mt Morgan project, while protecting GBM’s own balance sheet and core project focus.”
The Mt Morgan gold-copper project will be sold for 20.08 million shares in Smartset Services.
Upon completion of the deal, assuming Smartset succeeds in an $C8 million ($8.56 million) capital raising exercise, GBM will hold approximately 34.5 per cent in Smartset.
Smartset will also pay for any native title, landholder access and compensation agreement expenses from now until the end of the transaction – up to a maximum of $250,000.
The Mt Morgan mine operated for over 90 years from around the 1880s to the 1980s.
It produced 50 million tonnes of ore for a total of 7.65 million ounce of gold and 361,000 tonnes of copper.
Smartset has stated its plans to perform comprehensive exploration activities at Mt Morgan using airborne magnetics and electromagnetic geophysics.
Earlier in June, GBM stated it was closing in on the acquisition of Minjar Gold’s Twin Hills gold project.
Twin Hills has been estimated to hold 6.9 million tonnes with 633,000 ounces of gold.