Regis Resources (ASX:RRL) has agreed to acquire a mining licence, host to the Southern Star gold prospect in Western Australia, from Great Southern Mining (ASX:GSN), for up to $9 million in cash.
The consideration comprises an upfront cash payment of $4 million and contingent payments of up to $5 million, tied to gold price thresholds and upon discovering further economic mineralisation.
Regis, which has a market capitalisation of $3.37 billion, has been granted a right of first offer on defined resources up to one million ounces of gold-equivalent within Great Southern’s tenure in the Duketon Greenstone Belt.
In conjunction, both companies have entered into a strategic data collaboration and sharing agreement for the purpose of expediting new discoveries in the Duketon Greenstone Belt.
Post-sale, Great Southern will retain granted exploration licences, covering 421km2 in the Duketon Belt and a further 438km2 under application.
Managing Director Matthew Keane says this transaction is beneficial for both companies.
“It delivers a strong capital boost to fund aggressive exploration across Great Southern Mining’s highly prospective Duketon tenure, most of which remains underexplored,” Keane says.
“Meanwhile, Regis is perfectly positioned to leverage the near-term development upside from Southern Star. It’s a deal that creates immediate value and sets the stage for new discoveries in the Duketon Belt.”
Regis has up to 10 million tonnes of installed processing infrastructure in the Duketon Belt and has delineated more than 10 million ounces of gold mineral resources.
Great Southern says it is interpreted that the primary mineralised corridors in the belt continue into its tenure, incorporating 8km of the Erlistoun Trend, 7km of the Garden Well Trend, and 11km of the Rosemont to Ben Hur Trend.
The Southern Star prospect is located 3.5km south of Regis’ Ben Hur open put.
Great Southern mining is an Australian mineral explorer focused on discoveries in the Laverton district of Western Australia and Mt Carlton in north Queensland.
Regis Resources is an Australian gold producer focused on its portfolio of assets within the nation.
Write to Aaliyah Rogan at Mining.com.au
Images: Great Southern Mining
