Ora Gold (ASX:OAU) has signed a deal with Westgold Resources (ASX:WGX) to advance the Crown Prince deposit in Western Australia to production.
As part of the strategic alliance, both companies will negotiate an ore purchase agreement.
In addition, the agreement includes Ora granting to Westgold a right of first refusal in respect of the future purchase from any tenement owned by Ora, to be processed at Westgold’s Bluebird Mill at Meekatharra.
The alliance may also include other strategic collaboration initiatives, such as access to Westgold’s camp and associated facilities, and leveraging Westgold’s internal resources and intellectual property to fast track Crown Prince’s development.
Ora Gold CEO Alex Passmore says the alliance provides a short and tangible pathway to production and cashflow from Crown Prince.
“Ora and Westgold will work collaboratively over the next few months to define the development timetable,” he says.
“This alliance with a large regional operator with extensive processing infrastructure gives us strong confidence in the potential for future economic extraction of other advanced projects within our tenure.”
However, the alliance is contingent on the completion of a placement, under which Westgold will purchase more than 1.33 billion Ora shares at $0.0045 per new share to raise $6 million. The new shares will rank pari passu with existing shares.
Once complete, Westgold is expected to emerge with a 18.7% shareholding in Ora on an undiluted basis, and a 15% stake on a fully diluted basis.
The funds will allow Ora, which has a market capitalisation of $23.22 million, to accelerate further resource development, project development, and mining proposal workstreams at Crown Prince, alongside systematic regional exploration across its 677km2 tenure.
Ora Gold is a mineral explorer and developer that holds a substantial land package in the Murchison goldfield near Meekatharra, Western Australia. Its shares were up 25% to $0.005 as of 11:30am AEST.
Westgold’s Bluebird Operation lies 15km from Meekatharra and features an underground mine which feeds the Bluebird processing plant, which has a milling capacity of 1.6 million to 1.8 million tonnes per year.
Write to Aaliyah Rogan at Mining.com.au
Images: iStock
