Canadian miner Kirkland Lake Gold has agreed to sell the Stawell gold mine in Victoria to Melbourne-based equity fund, Arete Capital Partners.
Kirkland Lake suspended mining at the historic Stawell operation a year ago, but has continued underground exploration while the site has been placed under care and maintenance.
Gold production at Stawell dwindled in the years leading up to the suspension, falling to around 32,000 ounces in 2016 from more than 86,000 ounces in 2009.
Arete, which is chaired by former Western Mining chief Hugh Morgan, will pay Kirkland Lake $US6.25 million in cash for its Stawell Gold Mines affiliate, which holds the Stawell mine. The Canadian company will also retain a 2.5 per cent net smelter royalty.
Kirkland Lake chief executive Tony Makuch said the transaction was consistent with the company’s long-term strategy to focus on low-cost, high-grade core assets.
“We believe the management team at Arete is well positioned to optimise the operational potential of Stawell in a sustainable manner to create value,” Makuch said.
“I would like to thank the entire team at Stawell for their dedication and commitment over the years along with the strong support received from the local Victorian Government in Australia.”
The Stawell site was originally discovered during Victoria’s gold rush era in the 19th century. Kirkland Lake also operates the Fosterville gold mine in Victoria, its sole producing operation in Australia.