What's Happening?
Westgold Resources has entered into a binding asset sale agreement to divest its Mt Henry-Selene gold project, located near Norseman in Western Australia, to Alicanto Minerals. The transaction is valued at A$64.6 million, comprising A$15 million in cash and approximately 357.1 million Alicanto shares valued at A$19.6 million. Additionally, a deferred payment of A$30 million, payable in cash or shares, is contingent upon achieving specific performance milestones. The Mt Henry project, which contains a gold resource of 900,000 ounces, was last mined in 2019. The mineralization remains open along strike and down-dip, offering potential for resource expansion. Westgold's managing director, Wayne Bramwell, highlighted the strategic benefits of the transaction,
including cash inflow and exposure to project upside through a significant shareholding in Alicanto.
Why It's Important?
This transaction is significant as it reflects Westgold's strategic shift to focus on its core assets while providing Alicanto with an opportunity to expand its gold exploration and production capabilities. The sale allows Westgold to monetize a non-core asset, enhancing its financial position and enabling further investment in its primary projects. For Alicanto, acquiring the Mt Henry project offers a substantial increase in its gold resource base, with potential for further exploration and development. This deal could lead to increased gold production, benefiting both companies' stakeholders and potentially impacting the gold market in the region.
What's Next?
Following the completion of the transaction, Westgold will hold a 19.9% stake in Alicanto and will have the right to appoint a representative to the Alicanto Board. This strategic partnership is expected to facilitate further exploration and development of the Mt Henry project. Westgold is also exploring the sale of its Peak Hill and Chalice gold assets, indicating ongoing portfolio optimization efforts. Alicanto plans to invest in drilling and exploration activities at Mt Henry, aiming to unlock additional value and potentially increase gold production.
