Red Hill Minerals (ASX:RHI) has entered into a binding heads of agreement to acquire a 2% gross revenue royalty over tenements within the Sandstone Gold Project in Western Australia.
The tenements form part of Brightstar Resources’ (ASX:BTR) Sandstone Project acquired through its scheme of arrangement with Alto Metals, which delisted from the ASX in December 2024.
Since completing the scheme of arrangement, Brightstar has begun exploration on the tenements and is planning an aggressive program for the coming field season involving 80,000m of drilling across the Sandstone Hub in 2025.
Under the deal, Red Hill, which has a market capitalisation of $212.9 million, will pay $4 million to the vendors Bruce Legendre and Stephen Stone.
Further deferred contingent payments will be paid in installments equating to 50% of the royalty receipts from first eight quarters of future production from the tenements.
Executive Chairman Joshua Pitt says the company has taken the first step in diversifying its royalty portfolio across commodities and projects.
“We commend Brightstar on its consolidation of the Sandstone tenements as a result of its acquisition of Alto Metals in December 2024 and have confidence in the Brightstar team and their ability to unlock the significant potential of this exciting project,” Pitt says.
The company adds this royalty purchase is in line with its strategy to build a diversified commodity royalty portfolio.
Red Hill Minerals is an explorer that owns a diversified project portfolio comprising the Onslow, Pannawonica, West Pilbara and Curnamona projects.
Write to Aaliyah Rogan at Mining.com.au
Images: Red Hill Minerals
