Westgold Resources Ltd (ASX:WGX) has reached an agreement to divest its Higginsville Gold Operations (HGO) to RNC Minerals.
The deal would combine the Beta Hunt gold operations and HGO to enable expanded gold output, increased resource backing and plant ownership.
It would see Westgold divest its wholly owned subsidiaries in exchange for $25 million in cash and $25 million in RNC shares.
Transaction to provide solutions
Westgold managing director Peter Cook said the transaction gives both RNC and Westgold solutions for their project needs.
“The addition of the ‘bonanza grade’ gold discoveries and resource potential at Beta Hunt to the existing operation at Higginsville will provide enhanced gold output at lower costs, as well as security from ownership of substantial plant and infrastructure.”
“Bright picture for the future of the project”
Under the agreement, RNC will immediately pay Westgold $4 million of the $25 million in shares as a non-refundable deposit for a 40-day exclusive period
The exclusive period will allow RNC to complete its due diligence and planning for a settlement in a further 30 days.
Cook added: “Importantly the asset consolidation paints a bright picture for the future of the project and its employees.
“Westgold will become a significant shareholder in RNC Minerals and retain exposure to both HGO and Beta Hunt.”