Resource and Investment (ASX: RNI) should open higher today after emerging from a trading halt with an increased and extended finance package for the acquisition of Montezuma Mining's (ASX:MZM) subsidiary Peak Hill Metals.
Peak Hill Metals controls the Peak Hill gold deposit in Western Australia.
The original Taurus facility has been increased from $15 million to $19.5 million, and the repayment date of the facility extended by 12 months to 7 February 2015.
The historic Peak Hill gold project adjoins RNI’s Grosvenor gold project in Western Australia’s Bryah Basin region.
Peak Hill has JORC compliant gold resources of 550,000 ounces, which, when combined with RNI’s Grosvenor project, gives RNI a combined gold inventory of around 2 million ounces.
This is impressive for RNI, capitalised at $24 million, especially for a deposit with no sovereign risk.
Consideration payable to Montezuma comprises $2.8 million in cash, 8.4 million RNI shares and 2.1 million unlisted RNI options exercisable at $0.35.
In addition, Grosvenor Gold will pay Montezuma a 1% gross royalty, capped at $1 million, on all revenue received from production at Peak Hill.
The Bryah Basin is shaping up as an increasingly sought-after destination for gold exploration.
This Peak Hill transaction, and Independence Group's (ASX:IGO) recent earn-in to minnow Alchemy Resources' (ASX:ALY) Bryah Basin acreage, highlight a renewed focus on the region.
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