Sandfire Resources plans to offload its interest in the Sams Creek gold project in New Zealand to Auris Minerals for $23.2 million.
Sandfire stated that the project was “non-core” to the company in terms of scale and development.
It inherited the Sams Creek project when acquiring MOD Resources last year.
Sams Creek comprises two exploration tenements, EP 40 338 and EP 54 454 in the northwest of the South Island.
Should the transaction be successful, Sandfire will hold a 19.9 per cent shareholding in Auris, which will provide the company an exposure to the successes of Sams Creek.
“This represents a positive outcome for both parties,” Sandfire managing director and chief executive Karl Simich said. “For Sandfire, it provides an opportunity to leverage value from a non-core asset in partnership with a company with whom we already have a long-standing relationship in the Doolgunna region.”
“We look forward to concluding this transaction and to continuing to work closely with Auris, both as an ongoing joint venture partner in the Bryah Basin and as a strategic cornerstone investor.”
Sandfire works with Auris through its Mork Well and Doolgunna joint venture exploration projects in the Bryah Basin of Western Australia, where it is targeting volcanogenic massive sulphide (VMS) discoveries near the DeGrussa copper-gold mine.
The transaction is subject to a due diligence study, the approval of Auris shareholders and New Zealand regulatory consents.
Once complete, Auris plans to launch an “aggressive” exploration and works program to quickly advance Sams Creek towards a preliminary scoping study.
“This is a transformational acquisition for Auris, which once complete, will provide shareholders with exposure to a million-ounce gold project in a tier-1 mining jurisdiction,” Auris chief operation officer Mike Hendriks said.
“We have been actively seeking a strategic acquisition to complement our existing projects in the Bryah Basin, which are largely funded under joint venture arrangements, and the opportunity to acquire Sams Creek surpassed our expectations.”
Sandfire will continue to focus on its advanced base metal development projects in Botswana, Africa and Montana, the United States.