Sarama Resources (ASX:SRR) has executed a binding agreement with Orbminco (ASX:OB1) to acquire an 80% interest in the Mt Venn Project in the Eastern Goldfields region of Western Australia.
Orbminco’s interest in Mt Venn is held through its subsidiary Yamarna West, which is in an unincorporated joint venture with Cazaly Resources (ASX:CAZ).
As consideration for the 80% interest, Orbminco will receive 12 million CHESS Depositary Interests (CDIs) in Sarama. Orbminco also grants Sarama a right of exclusivity in return for a cash payment of $20,000.
The completion of the transaction is subject to certain conditions including regulatory approvals and executing an assignment agreement by Yamarna and Cazaly.
Sarama, which has a market capitalisation of $10.47 million, says the project is currently in exploration phases and is operated by Yamarna.
At present, Yamarna is responsible for all costs incurred by the joint venture until completing a Prefeasibility Study on the project. At that point, Cazaly may elect to begin contributing its pro-rata share of future joint venture expenditure to maintain its 20% interest, or alternatively, elect to withdraw from the joint venture.
In the event that Cazaly withdraws, its interest will be transferred to Yamarna and the company will be granted a 2% net smelter return royalty on minerals extracted from the project.
Executive Chairman Andrew Dinning says the company is pleased to be nearing completion of the acquisition of the majority stake in Mt Venn.
“The addition of the Mt Venn Project will create a major 1,000km2 area-play and significantly enhances the probability of making the next big discovery in a region that continues to deliver new deposits in previously unexplored areas, including the regionally significant Gruyere deposit just 35km east of the Mt Venn Project,” Dinning says.
Meanwhile, the company says soil sampling is progressing at the Cosmo Project.
The Mt Venn Project, covering 420km2, is located 40km west of the Gruyere Gold Mine in Western Australia.
Sarama Resources is a mineral explorer focused on primarily gold in the Western Australian Goldfields region.
Write to Aaliyah Rogan at Mining.com.au
Images: Sarama Resources
