Horizon Minerals Ltd (ASX:HRZ) has executed a binding royalty sale and purchase agreement with Vox Royalty Corp (CVE:VOX) (OTCMKTS:VOXCF) to divest its 100% interest in two royalties.
These royalties cover the Janet Ivy and Otto Bore gold projects in the Western Australian Goldfields.
The agreement will see Vox pay A$7 million in cash and shares with A$4 million in cash upon completion and A$3 million in cash or Vox shares at Vox’s election upon Vox receiving cumulative payments of A$750,000 from the transaction royalties.
“Divestment strengthens balance sheet”
Proceeds will add to Horizon’s existing cash reserves as it advances a consolidated feasibility study through to a development and financing decision this year.
Horizon managing director Jon Price said: “Horizon’s core focus remains firmly set on developing a standalone gold business in the Kalgoorlie and Coolgardie regions.
“This divestment further strengthens our balance sheet as we progress the large-scale drilling program and advance the consolidated feasibility study through to a development decision and financing stage in the second half of 2021.”
The background
Since 2001, Horizon has held the Janet Ivy royalty which comprises a A$0.50 per tonne payment on ore mined and treated from the Janet Ivy tenements owned by Norton Goldfields Ltd.
In 2018, the company divested its interest in the Lehmans gold joint venture to Saracen Mineral Holdings, now Northern Star Resources Ltd (ASX:NST), for A$2.5 million in cash.
As part of the divestment, a 2.5% net smelter royalty is payable once production reaches 42,000 ounces from the Otto Bore tenements and ends on the production of 100,000 ounces.
The deal with Vox is expected to complete in the June quarter of 2021 and is subject to standard conditions precedent for a transaction of this nature including the execution of deeds of assignment with the continuing parties.