Matsa Resources says negotiations are well advanced on binding agreements with two China-based firms that would enable it to commence development of its Norseman gold project.
Matsa shares jumped on the news, closing up 15 per cent, to trade at 23 cents.
Matsa announced this morning that site visits and due diligence by Shandong Gold Mineral Resources Group and China Nerin Engineering Co would commence as soon as possible with a view to agreeing on final terms to develop the 1.47 million ounce Norseman project.
Shandon has signed a non-binding terms sheet, and China Nerin has signed a letter of intent, Matsa said.
Terms of the non-binding agreements include the Chinese investors acquiring a significant interest in the project; securing a $103 million finance facility to establish the mine; participating in its definitive feasibility study; establishing an joint venture entity to look at other resources opportunities; and securing off-take agreements for magnetite by-products produced at Norseman.
The company said it was confident negotiations with either of the parties could lead to a binding agreement that would allow it to commence development at Norseman.
"There has been significant interest among numerous Chinese investors in our Norseman Gold Project for some time and our over-riding priority has always been to ensure we get the best deal for our loyal shareholders for the long term" executive chairman Paul Poli said.
"Given the level of interest in Matsa and both our projects in Norseman we could have already completed a deal with other Chinese investors, but those terms were less favourable than the current discussions.
"That's why we have decided to patiently continue negotiations with these prestigious Chinese companies so we can negotiate a deal that allows for the development of the Norseman gold project and is beneficial to all shareholders."
Matsa said, however, the negotiations were a positive step forward, but cautioned investors that there was no certainty an agreement would be reached, and it would keep the market informed in due course.
