Mod sells gold project for $4m

Copper explorer MOD Resources has entered into an agreement to sell its Sams Creek gold project in New Zealand to a company planning to list on the ASX.

Perth-based Mod will receive $1.75 million in cash and 10.25 million shares in Condamine Resources in exchange for Sams Creek, with the scrip component to leave Mod with an up to 15 per cent stake in Condamine if the company’s IPO plans go ahead.

Condamine is also expected to give Mod shareholders a priority offer as part of its IPO, which is expected to be completed in the December quarter.

The proceeds from the sale, which is subject to Condamine listing on the ASX, will be used by Mod to pay off its $1 million in debt and fund exploration and development work at its Botswana copper project.

Mod managing director Julian Hanna said the sale was a good outcome for the company’s shareholders and would allow the management team to put all its energy into Botswana.

“The SSA provides the opportunity to monetise the company’s non-core gold assets by divesting them to a new, dedicated New Zealand-focused gold exploration company,” he said.

“This transaction has the additional benefit of preserving Mod shareholders’ exposure to an excellent gold project which has significant upside.

“We look forward to supporting Condamine through the IPO process.”

Mod shares were 1.5 per cent lower to 6.2 cents each at the close.