Cobra Resources Plc (LSE:COBR) announced a deal to sell its Wudinna gold assets in Australia for A$15 million to Barton Gold.
Cobra will receive up to A$8 million in cash and A$7 million in Barton Gold shares, paid in staged tranches.
Also, Cobra can earn up to A$7.5 million in production-linked payments (accruing at A$50 per ounce on the first 150,000 ounces produced at the project).
The Wudinna gold assets include a 279,000-ounce JORC Mineral Resource Estimate defined by Cobra in 2023.
Cobra will, meanwhile, retain mineral rights for scandium, titanium, vanadium, gallium, yttrium, tellurium, iodine, the rare earth elements and certain radioactive elements across its remaining Wudinna tenements.
Also, it retains an exploration licence for the Boland heavy rare earth element project.
Cobra managing director Rupert Verco highlighted that minimising capital spending by utilising existing infrastructure and finding synergies through scale are ‘the key to maximising value from small-to-mid-sized gold deposits’ – which is why, he suggests, the Barton deal is mutually beneficial.
“This transaction will take Barton Gold's resource to over two million ounces, with existing infrastructure,” Verco said in a statement.
“It provides Cobra the opportunity to become a significant shareholder in a province-scale gold strategy, while enabling us to direct capital and attention to unlocking the value in Boland, which has the potential to become a significant low-cost source of critical terbium and dysprosium for the Western world.”
Verco added: “The transaction strengthens our balance sheet and our strategic optionality.
“Importantly, the deal maintains Cobra's exposure to future upside through milestone payments and production-linked consideration.”