Gold explorer in cannabis move

Former gold explorer International Goldfields has become the fourth Western Australian company to move into the cannabis industry, with the acquisition of Uruguayan business Winter Garden Biosciences.

Goldfields will acquire 85 per cent of Winter Garden in exchange for $7.5 million of Goldfields shares, making the deal similar to a reverse takeover.

It will also be conditional on Goldfields completing a capital raising of around $1 million and/or the sale of Goldfields’ holdings in Santa Fe Gold.

The move follows that of Odin Resources, which yesterday announced an agreement to acquire The Hemp Corporation, Phytotech, which listed on the ASX earlier this year, and Capital Mining, which is acquiring US-based Nutrawerx.

In a release today, the company said Winter Garden would benefit from a lax regulatory regime in Uruguay, particularly for research and development of cannabis with a higher THC content.

The chemical THC is effectively the active ingredient in marijuana.

Goldfields director David Tasker said Winter Garden would be developing products to target symptoms of human illnesses.

“This agreement will create an opportunity for (Goldfields) shareholders to realise value from one of the fastest growing pharma industries in the world - medical and therapeutic cannabis,” he said

Shares in International Goldfields were up 50 per cent to 0.3 cents per share at the close.