Gold mining and exploration company Beacon Minerals (ASX:BCN) reports it has executed a binding tenement sale agreement with privately held Geko Pit to acquire 2 mining leases in Western Australia.
The company says it intends to acquire mining lease M15/621 and miscellaneous lease L15/355 from Geko. These leases are located 26km northwest of Coolgardie, and 15km south-southwest of Beacon’s Jaurdi Gold Processing Plant.
Beacon states the acquisition of the tenements from Geko is part of its strategy of increasing the mine life at Jaurdi by acquiring projects that build mine reserves and complement current operations.
The company intends to leverage its Jaurdi Processing Plant, mining infrastructure and operational team to realise the potential of the Geko tenements, and it has also completed an internal review of the Geko mineralisation and will rebuild the resource model with a mineral resource estimate (MRE) expected to be issued in Q1 2023.
Key terms and conditions of the tenement sale agreement include Beacon paying $7.75 million at settlement of the acquisition, and paying $3 million from production at a rate of 4% of the recovered gold value until a total of $10.75 million in consideration has been paid.
Beacon reports it will also contribute a payment of $50,000 at settlement for Bulletin Resources (ASX:BNR) to waive its interests to and rights in the tenements, with evidence of this being provided by Geko at settlement.
Settlement of the acquisition is subject to Geko providing all required permissions for Beacon to peg miscellaneous licences surrounding the tenements for the purpose of road haulage and pipeline access tracks, as well as consent in writing for Beacon to obtain access and to conduct mining operations on the tenements.
Other conditions Geko will provide include transferring ownership of the existing ore stockpiles to Beacon, as well as the receipt of all third-party consents necessary to give effect to the transfer.
Lastly, Geko will ensure the tenements are in good standing, in full force and effect and free of encumbrances at settlement.
Beacon reports the settlement will take place 3 business days after satisfaction of the last of the conditions precedent have been met, and it will fund the costs of the acquisition using current cash reserves.
The company has also granted Geko an option under the tenement sale agreement to acquire the tenements back for nil consideration during the option period commencing on 31 December 2026, and ending on 31 March 2027.
If this option is not exercised during this period, the tenements will be retained by Beacon.
Beacon Minerals is an ASX-listed gold mining and exploration company based in the Eastern Goldfields of Western Australia. The company operates 2 projects in this region including the Jaurdi Gold Project 35km northwest of Coolgardie, and the McPhersons Project situated 5km south of Coolgardie.
Images: Beacon Minerals Ltd
