Forrestania Resources (ASX:FRS) has entered a Binding Heads of Agreement to acquire the rights, title, and interest in gold tenements within the Coolgardie region of Western Australia from Christopher Alan De Courcy Ryder and Lloyd George Holdings (Gibraltar).
The acquisition consideration comprises $2,500,000 in shares in Forrestania, calculated using the five day volume weighted average price (VWAP) preceding the execution date.
Following an initial 15,000 ounces of JORC-compliant gold resources from any of the tenements, an additional consideration of $40,000 per 1,000 ounces of JORC resources will be payable. This is to be capped at 150,000 ounces and payments will comprise 50% cash and 50% shares in Forrestania.
The deal also grants Gibraltar a 1% gross revenue royalty on all gold mined from these tenement, to be paid after an initial 150,000 ounces has been mined.
Chairman David Geraghty says that the acquisition “continues Forrestania’s disciplined strategy of consolidating prospective tenure around our Coolgardie Hub” with a focus on granted mining tenure.
“The transaction structure aligns consideration with exploration and acquisition success while preserving capital which can be assigned to advancing Forrestania’s production ambitions across our portfolio of West Australian gold assets,” Geraghty says.
The Coolgardie Hub is at the western edge of the Coolgardie Domain of the Kalgoorlie Terrane in Western Australia. The new tenement package contains leases which are located to the south of the company’s existing tenure.
Forrestania Resources is a gold exploration and development company, building a portfolio of projects across Western Australia.
Write to Amy Rotman at Mining.com.au
Images: Forrestania Resources
