Mt Magnet Gold acquires gold tenements for $1.6m

South African gold company Harmony Gold Operations Ltd subsidiary Mt Magnet Gold NL will acquire the gold tenements of the Dalgaranga joint venture, between AXG Mining Ltd and Equigold NL, for an estimated $1.6 million.

The consideration is $250,000 in cash payable upon signing, and a deferred consideration based on a percentage royalty, calculated on the production of 20,833 ounces of gold and payable on a sliding scale depending on the price received for the preceding month.

The purchase price of $1.6 million is based on an assumed gold price of $780/oz.

All proceeds of the sale will be payable to the JV participants on a proportional basis - West Perth's AXG receiving 49.9 per cent and Applecross-based Equigold NL receivng 50.1%.

Mt Magnet Gold will assume all environmental liabilities of the project and the payment of royalties associated with the original purchase.

Formal execution of the sale agreement is expected to occur in the very near future.