Ausgold secures farmland for $10m

Ausgold has bought two farming properties covering more than 1,000 hectares at its Katanning Gold Project for $10 million.

The company today advised the market that it has entered into binding agreements to acquire the two freehold properties, covering a combined area of 1,026 hectares, 275 kilometres south-east of Perth.

Ausgold said one property, owned by John Smith, covers 94 hectares and will be the primary source of ore in the first 18 months of production of its 3.04-million-ounce Katanning Gold project.

The second property, owned by Wallacup Holdings, covers 932 hectares and is earmarked for key mine infrastructure.

Ausgold said it would lodge applications to convert the exploration tenure over the property to mining leases.

The total consideration of the acquisitions are $10.76 million, with $3.12 million to be paid on signing the agreements and the balance to be paid in April 2024, Ausgold said.

"Ausgold is currently considering traditional and non-dilutive funding alternatives to fund the deferred consideration and land acquisitions as part of the overarching project finance for the development of the KGP," the company said on the ASX.

Ausgold managing director Matt Greentree said this was an important milestone for the Katanning Gold project.

“We are pleased to have reached agreement with two key landowners to secure these properties, which cover significant parts of the early mine plan as well as proposed mine infrastructure,” he said.

“This is a significant de-risking step for the development of a proposed long-term mining operation at the KGP.”

Ausgold said the vendors were not related parties of the company.