Medallion Metals (ASX:MM8) has entered into an exclusivity agreement with IGO (ASX:IGO) regarding acquiring certain assets of the Forrestania Nickel Operation in Western Australia.
The Forrestania Nickel Operations assets Medallion proposes to acquire includes mineral tenure and infrastructure associated with the Cosmic Boy processing facility, subject to IGO preserving priority rights for its own activities at Forrestania.
Medallion Metals, which has a market capitalisation of $17.53 million, will pay IGO an upfront cash payment of up to $15 million, including a $1 million exclusivity fee within five business days of executing the agreement. The total cash and liability assumption consideration is to be not over $50 million.
The exclusivity period is nine months, with the ability to extend for up to an additional three months.
Both companies will negotiate, on a non-exclusive basis, the grant of gold and silver rights across the Forrestania tenement package, subject to the existence of any pre-existing third-party rights.
Managing Director Paul Bennett says bringing the gold-copper resources at Ravensthorpe with the Forrestania infrastructure has the potential to unlock value in a short timeframe.
“This is a transformational opportunity for Medallion,” Bennett says.
“Additionally, establishing gold processing capability at Forrestania creates an opportunity to commercialise stranded deposits in the region, as well as reinvigorate gold exploration across the highly prospective Forrestania greenstone belt.
“We welcome the opportunity to partner with IGO to seek to create a new gold business at Forrestania, while allowing IGO to continue to pursue its corporate objectives in the region.”
During the exclusivity period, Medallion Metals plans to complete due diligence on the assets, in parallel with advancing legally binding transaction documents.
The company will also complete work on an addendum to the Prefeasibility Study that considers the sulphide-only development scenario and options analysis. The bank of recent study work will ensure this analysis has minimal cost and can be completed rapidly.
In September, Medallion Metals intends to mobilise a drill rig to the Ravensthorpe Gold Project to begin 15,000m of drilling.
The company will also conduct testwork and studies considering development of the sulphide mineral resources at Ravensthorpe and incorporate an option analysis assessing standalone processing at Ravensthorpe versus trucking to the Cosmic Boy plant.
Medallion Metals is an advanced gold and copper explorer in Western Australia, focused on its flagship Ravensthorpe Gold Project.
Write to Aaliyah Rogan at Mining.com.au
Images: Medallion Metals
