Gascoyne Resources Ltd (ASX:GCY) has entered into an agreement to sell the non-core Mumbakine Well Project to Capricorn Metals Ltd (ASX:CMM), which owns the contiguous Karlawinda Gold Project tenure in the Pilbara region of Western Australia.
Gascoyne will receive $1.25 million upon completion of the transfer of the exploration licence and a 0.5% net smelter royalty on all gold produced from the project.
Contingent additional payments
In addition, Capricorn Metals has agreed to make contingent deferred payments as follows:
- $1.5 million upon the announcement by Capricorn of a JORC-compliant mineral resource estimate (MRE) in excess of 200,000 ounces of gold on the project, representing a minimum of 6.55 million tonnes at a minimum grade of 0.95 g/t gold; and
- $2 million upon the announcement by Capricorn of a board decision to commence commercial mining activities on the project.
Other criteria
In the event that Capricorn announces to the ASX a decision to commence mining activities prior to the definition of a JORC-code-compliant MRE meeting the criteria referenced above, Capricorn must pay both contingent deferred payments.
All amounts are payable in cash or Capricorn shares valued at a 20-day volume-weighted average price (VWAP) prior to either completion occurring or the release of the ASX announcement.
Completion of the sale is expected to occur by the end of June.