Sarama Resources (ASX:SRR) has completed its acquisition of a majority stake in the Cosmo Gold Project in Western Australia from Adelong Gold (ASX:ADG) and privately held Cosmo Gold.
In August 2024, the companies entered into a binding agreement under which Sarama would acquire an 80% interest in Adelong’s subsidiary, Cosmo Gold, which holds the Cosmo Project, by issuing 25 million shares and 7.5 million unlisted options to Adelong.
An unincorporated joint venture has now been formed between Sarama and Cosmo Gold, which holds the remaining 20% interest in the project. Sarama has been appointed as the operator and assumes sole responsibility for funding all activities on the project up to a point of a decision to mine being made.
Sarama, which has a market capitalisation of $9 million, has the option to acquire the 20% interest from Cosmo Gold within two years for $1.25 million in cash or shares.
The 580km2 project, located in the Eastern Goldfields of Western Australia, covers a 50km strike length and the entirety of the Cosmo-Newbery Greenstone Belt.
Sarama CEO Andrew Dinning says the company has already begun a broad-scale, systematic exploration program and intends to conduct work on the first drilling targets.
Future exploration programs will initially follow up on preliminary targets generated from regional soil sampling and limited reconnaissance drilling programs.
“We would also like to acknowledge the work done on the project by Cosmo Gold and look forward to the ongoing support of the Traditional Owners for Sarama’s planned endeavors,” Dinning says.
“The project has excellent access and importantly scale, favourable lithological and structural settings and historical high-grade workings dating back to the 1890s.”
Adelong’s Managing Director Ian Holland says completing this transaction marks a milestone for the company.
“By securing a significant equity stake in Sarama Resources, we are not only strengthening our balance sheet but also positioning the company to benefit from Sarama’s high-quality gold assets,” Holland says.
Adelong plans to use the funds to pursue further advancements within its namesake project in New South Wales and its lithium tenements in Brazil.
The Adelong Goldfield Project is an advanced development asset, which has historical production of around 800,000 ounces of gold. The project forms part of a larger structural feature known as the ‘Gilmore Suture’.
Adelong’s Brazilian lithium tenements comprise the Santa Rita do Aracuai and Paraíba Province lithium projects.
Write to Aaliyah Rogan at Mining.com.au
Images: Sarama Resources
