Kalamazoo Resources is selling its Snake Well gold project in the Murchison region of Western Australia to Adaman Resources for $7 million.
The Snake Well sale follows Kalamazoo’s acquisition of the entire Wattle Gully gold project and the surrounding Castlemaine Goldfield in Victoria in June.
Kalamazoo can engage Adaman to provide up to $4 million of drilling services at the Wattle Gold project under the Snake Well deal. These funds would be deducted from the sale proceeds.
Luke Reinehr, Kalamazoo chairman, said proceeds from the Snake Well sale would fully fund and accelerate its initial exploration and drilling programs at Wattle Gully and in the Pilbara, Western Australia over the next two years.
“Snake Well has been a wonderful initial project for us with its very successful trial pit (4459 ounces of gold mined at 6.83g/t in 2016) and now provides the opportunity to generate further cash for our next stage of growth,” Reinehr said.
“Importantly, we have kept an interest in the base metal rights at Snake Well which provides Kalamazoo and its shareholders with further opportunities.”
The $7 million sale proceeds will be paid in cash progressively over the next 24 months and is secured across the project.
Adaman is a privately-owned mining services company with drilling, logistic and corporate capabilities.
It is co-owned by two independent mining services companies, headed by Nathan Mitchell of The Mitchell Group and Mark Rowsthorn of the Rivet Group.
Adaman also acquired the Kirkalocka gold project in Western Australia’s Mid West region in May.