The gold and copper explorer Aeris Resources Limited (ASX:AIS) announced the completion of the sale of its Yandan Gold Exploration Project. The project is acquired by GBM Resources (ASX:GBZ) at a price of A$3 million. GBM to issue shares to Aeris to the tune of A$3 million as a payment for the acquisition.
Image Source - ©Kalkine Group 2020
Aeris to receive shares of GBM Resources worth A$3 million at A$0.135, around 22.22 million shares. GBM would also pay a Net Smelter Royalty of 1.5% on the first 300,000oz of gold equivalent mined from the project.
Aeris has also subscribed to the shares of GBM worth A$1 million at A$0.135. Once all the shares are allocated, the total number of shares would aggregate to nearly 29.6 million shares, taking Aeris stake in GBM Resources to 6.85%.
The Yandan Gold Project has a total resource of 4,000 tonnes with 300koz @ 2.4g/t in the category of inferred resource.
The Managing Director of GBM Resources, Peter Rohner, expressed his views on the deal and called the completion of the deal as an important milestone for the Company. With the addition of the Yandon Project, the total Mineral Resource Estimates (JORC Compliant) would increase to 852,000oz of gold.
Major Projects of Aeris Resource
Aeris Resources is a diversified mineral exploration company engaged mainly in gold and copper. The major projects include Cracow Gold Project, Tritton Copper Project and Torrens IOGC Project. The Company holds 100% interest in Cracow and Tritton. Further it holds 70% interest in the Torrens Project.
The JORC compliant Mineral Resource Estimate of Triton Copper Project is 17,500kt @1.5% of Cu grade with 250kt Cu.
The Carcow Gold Project has a gold reserve of 550kt @ 5.1 g/t of 89koz of gold. The Company acquired the project in July 2020 at a price of approximately A$125 million. Aeris made an upfront payment of A$60 million while a sum of A$15 is scheduled for payment in 2022. Aeris will also have to pay a royalty on production till the year 2027 with a capping of A$50 million.
Aeris has put the production guidance for FY21 in the range of 70-75koz at an AISC of A$1,525-1,575.
Informative Read: Why Should Every Investor Closely Track Gold Price?
Share Price Movement
The share price of Aeris remained flat post the announcement. The stocks closed the day’s trade at A$0.11 with a market cap of A$208.6 million as on 14 January 2021.