Kalamazoo sells Snake Well to Adaman for $7m
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Under the deal, Kalamazoo can elect to have Adaman provide up to $4 million of drilling services for its Wattle Gully gold project in Victoria’s Castlemaine region, which would be deducted from the total sale proceeds.
The sale proceeds will be paid over two years, with the first $1.5 million to be paid to Kalamazoo by the end of 2018.
This is the latest of several substantial deals by Adaman, which was established by Mark Rowsthorn-led Rivet, Danny Sweeney’s SMS Innovative Mining Solutions and Nathan Mitchell’s Mitchell Group Holdings. Rivet and SMS have subsequently merged.
Adaman has a lead role in the planned recapitalisation of Eastern Goldfields and in May paid $12 million for Minjar Gold’s Kirkalocka project.
Kalamzoo’s chairman Luke Reinehr said the funds would be put towards advancing the miner’s exploration program at Wattle Gully, which it acquired in June, as well as its four gold tenements in the Pilbara.
“The sale of the Snake Well gold project is an excellent result that will enable Kalamazoo to fully fund and accelerate its initial exploration and drilling programs at Wattle Gully and in the Pilbara over the next two years,” Mr Reinehr said.
“Snake Well has been a wonderful initial project for us with its very successful trial pit (4,459 ounces of gold mined at 6.83 grams per tonne in 2016) and now provides the opportunity to generate further cash for our next stage of growth.”
Kalamazoo’s shares were up 21 per cent to trade at 11.5 cents each by the close of trade.