The lease comprises the operating Portia Gold Project and adjacent pre-development North Portia Copper-Gold Project.
Consideration for the transaction will include $13.5 million in staged cash payments over 18 months.
The exchange and lodging of bank guarantees for CMC to take full responsibility for rehabilitation obligations, has occurred.
This means that CMC has replaced Havilah’s $1.2 million in bank guarantee obligations.
Accordingly, Havilah has no further exposure to rehabilitation liabilities on the lease.
In addition, CMC has confirmed that funds for the first payment of $1 million are immediately available to be paid upon closure.
No impediments to closure
Havilah said completion of the required documentation and approvals had taken longer than anticipated but was now well advanced.
At this time there are no impediments foreseen that will prevent closure of the transaction within the next two weeks.
This transaction is the next step in Havilah’s association with CMC, which started with a 50% revenue sharing arrangement that resulted in the Portia mine being developed.
Gold revenue stream
Havilah will continue to receive its 15% gold revenue stream from the Portia mine until 30 November 2018, when the oxidised ore in the Portia pit is expected to be mined out based on the current mine plan.
At that time this interest will convert into a 2% net smelter return (NSR) royalty on any further gold sales from Portia.
The Benagerie lease transaction allows Havilah to focus more attention on the advancement and ultimate development of the Mutooroo and Kalkaroo copper-cobalt-gold projects.