Once the deal formally goes through, AIM-listed Alba will own 90% of the Clogau gold project which is located in the Dolgellau gold belt in Wales. The remaining 10% will be free-carried to commercial production, although could end up taking that stake further down the line.
The project comprises the Clogau gold mine as well as a “large number” of highly prospective gold targets and former gold workings, with a total option area of almost 107km2.
The wedding bands of the Queen Mother, Queen, Princess Margaret, Princess Royal and Princess Diana were made from the same nugget drawn from the Clogau mine.
Alba is paying £650,000 in shares to Victorian Gold – the ultimate parent company of GMOW – as well as a one-for-three warrant option.
As part of the deal, Victorian has agreed to effectively write off the £1mln of loans it made to GMOW.
“For the first time in many years, the Clogau Gold Project is moving to the majority ownership of one company,” said executive chairman George Frangeskides.
“This will allow us more readily to progress the plan for re-opening the Clogau Mine, as well as making a push into regional exploration of the extensive and under-explored Dolgellau Gold Belt.”
He added: “We will not be depleting the company's cash reserves with this proposed acquisition, and the shares that will be issued on completion will be subject to lock up and orderly marketing restrictions for a seven-month period.”
Shares fell 2% to 0.39p early on Monday.