Carrick Gold says it is aiming to become the dominant gold explorer and developer in the northern goldfields, after acquiring Pioneer Resources' Mt Jewell gold tenements for $8 million.
The transaction, which includes the highly prospective Trugurtha and Hughes gold deposits, will be paid in four instalments.
A mining lease application over the two deposits is being processed, Carrick said.
Carrick chairman Laurence Freedman said the acquisition complemented the development of the company’s nearby flagship LKK project, situated an hour’s drive from Kalgoorlie.
Mr Freedman said the company remained well on track to commence production late this year, and the Mt Jewell tenements would be would be incorporated into the mine planning process.
“They deliver obvious synergies, both in terms of improved operating economics and development, as well as cementing our regional consolidation strategy,” Mr Freedman said in a statement.
“Importantly, it delivers a material amount of JORC Resources – a 23 per cent increase – to our existing gold inventory.
“We will have just under one million ounces in total. Significantly, all our resources, including Mt Jewell, are close to existing infrastructure, being some 50km north of Kalgoorlie.”
Pioneer Resources managing director David Crook said the sale of the tenements was a mutually beneficial transaction that delivers significant cash to the company.
“This transaction yields much of the return that the company may have received over the initial production years on a risk-free basis,” Mr Crook said.
“In addition, the immediate injection of funds enables Pioneer to accelerate drilling and seek further discoveries, and provides real capacity to investigate external opportunities as they arise.”
At close of trade today Carrick Gold stocks had gained 9.9 per cent to trade at 39 cents, while Pioneer shares were up 4.7 per cent, at 2.2 cents.