Aureka’s (ASX:AKA) will issue 3.75 million shares to property investor and international mining company RDI Mining as part of the company’s strategic land partner strategy.
As part of the investment and partnership, Aureka will gain access to the privately held company’s international network of low-cost mining suppliers, which has the potential to further lower Aureka’s drilling and per ounce finding costs.
To ensure Aureka is maximising its in-ground exploration spend, $2 million of land has been transacted via nomination agreements with property investors.
The matching put-call agreements allow Aureka to repurchase the land at any time in the next 48 months, for cash or, at the investor’s election and subject to shareholder approval, AKA shares, and in certain trigger events, gives the investor the right to require Aureka to purchase the land.
The investor receives time-based returns. Aureka says these agreements achieve a far superior capital light outcome for the company relative to secured mortgage arrangements.
In its real estate strategy, the overall land use of its owned or controlled real estate is not expected to vary from current agricultural activities.
As such, the land holdings will continue to generate agricultural lease, residential rental and other similar income.
All property holdings are being managed with careful environmental practices.
Meanwhile, Aureka is continuing works at its flagship Stawell Corridor Irvine Gold Project, and the nearer term production potential at the St Arnaud Comstock Project.
Both projects have JORC resources and recent drilling results have the potential to expand the current resource inventory. As Aureka advances the Irvine Project, it is following in the footsteps of other Victorian explorer-developers, securing permanent project land access.
The subject land includes the western flank discovery site drilled earlier in the year (diamond drillholes RD046-RD047).
The company says this allows for an ongoing on-site team presence, efficiency and flexibility in drill programs, staff accommodation savings and provides potential options for future infrastructure locations.
The Irvine Project is one of Victoria’s largest undeveloped gold resource projects and adjacent exploration target where Aureka has recently reported some of the highest-grade assays since discovery.
Write to Adam Orlando at Mining.com.au
Images: Aureka
