Intermin Resources has agreed to divest its Menzies and Goongarrie gold projects in Western Australia to Kingwest Resources for $8 million.
Kingwest will pay $3.375 million in cash and provide 4.625 million in shares over two tranches for the projects, making Intermin a substantial holder in the company.
Menzies and Goongarrie comprise 38 mining, prospecting and exploration licences with a JORC 2012-compliant resource of 195,000 ounces of gold.
Intermin managing director Jon Price said the divestment of the mines would help the company achieve its strategy of developing a standalone gold project in the Kalgoorlie and Coolgardie regions.
“The deal is another step in Intermin’s strategy of monetising assets through mine development or generating value through the divestment of lower priority projects to support future growth plans and minimising shareholder dilution wherever possible,” Price said.
Kingwest Resources owns one of the largest tenement packages in the Eastern Goldfields with more than 760 square kilometres and has hopes to expand this to 935 square kilometres.
The company reported high grade drilling results from the prospective Eastern Goldfields projects Gambier Lass North, Crawford and King of the West last month.
“With this latest drilling we’ve begun to check off some of the goals that we set out to achieve since listing late last year, including a better understanding of the geology at Crawford and to delineate a new exploration target at Gambier Lass North, looking at a potential (mineral resource estimate) on that particular project,” Kingwest chief executive officer Steve Woodham said.