Westgold Resources Limited (ASX: WGX) announced on 26th March 2019 that the company reached an agreement to divest its Higginsville Gold Operations and sell it to RNC Minerals. As per the company, the deal would combine the Beta Hunt Gold Operations and rest of the tenements that makes up the Higginsville Gold Operations. The proposed transaction will mark the company’s disinvestment from the wholly owned HGO and selling it to RNC Minerals for an exchange of $25 million in cash and $25 million in RNC shares.
Westgold Limited also mentioned that the proposed transaction is subject to approvals from FIRB and Toronto Stock Exchange if required and would see an immediate payment of $4 million from RNC Minerals in shares as a non-refundable deposit for a 40-days exclusive period to reckon the due diligence and planning for a settlement in a further 30-days under the option agreement.
The sale of the proposed operations and its tenement is expected by the company to complete on a walk-in walk-out basis, subject to typical adjustments. As per the company, all the employees of the company will retain their jobs along with any accrued benefit from the sales.
As per the Managing Director, Peter Cook, the proposed transaction serves both Westgold and RNC their respective needs and the company will retain exposure to the recently discovered bonanza grade gold and resource potential of the Beta Hunt at HGO by holding the stake in RNC Minerals. The recently discovered bonanza grade is expected to increase the gold output from the HGO project at a lower cost. Also, the company will retain its focus on the three gold operations in the Murchison Region and devote inputs to expand the gold output.
The company’s press release highlighted that PCF Capital Group had advised the company over the proposed transaction.
The trading of shares of the company was on a halt prior to the announcement.
In a recent announcement made by the Doray Minerals Limited (ASX: DRM) on 1st March 2019, the company had entered a binding Term Sheet agreement to sell Andy well and Gnaweeda gold projects to Westgold Resources Limited on 24th December 2018. DRM informed the exchange that it had terminated the agreement upon the non-fulfilment of the condition by Westgold Resources within the agreed end date.
As per a recent status update from the company, it informed the exchange that it had retained the significant interest in the Cue Project in Western Australia after Musgrave Minerals Limited (ASX: MGV) could not meet the requirements of the non-binding Term Sheet agreement entered on July 2018 with the company.
After the non-fulfilments of the agreement, Musgrave now will continue to engage with the company on a mutually beneficial processing option for the existing resources.
During the time of writing this report, the share of the company is trading at A$1.280 (as on 26th March 2019), up by 6.667% as compared to its previous close with an average volume of 1,269,860 shares.
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