Mutiny Gold has announced plans to move to full ownership of the Gullewa gold project in Western Australia and to raise $8 million from investors.
Mutiny has advised Redhill Resources Corp (formally ATW Gold Corp.) of its intention to move to 100 per cent ownership of Gullewa .
Under the Gullewa farm-in agreement between the companies, Mutiny is committed to pay $9 million by installments to earn 70 per cent ownership and has the right to acquire the remaining 30 per cent by paying an additional $4 million.
Redhill will retain the right to 10 per cent of net profit after capital payback. To date Mutiny has made payments totaling $3 million.
Mutiny said its scoping study for the Deflector deposit, within the Gullewa tenements, and recent drilling results, make Gullewa a compelling acquisition.
It said the Deflector scoping study has confirmed very low forecast production costs, making the project a launch pad for a significant mining house.
"There are also substantial additional quantities of gold, copper, and silver on the tenements, as well as considerable upside in Iron" said Mutiny Gold's managing director John Greeve.
The completion of the acquisition of the outstanding interest in the Gullewa tenements will be in two stages.
Firstly, Mutiny will raise $8 million by way of an equity placement to institutions, to move to 70% ownership of the Gullewa tenements, including transfer of all tenements to Mutiny. This will enable all permitting and administration to be undertaken by Mutiny.
Following completion of tenement transfers to Mutiny, the company will then subsequently settle the $4 million purchase of the outstanding interest in the tenements. The company is currently reviewing plans to fund this stage by way of a loan from a financial institution as a means of reducing shareholder dilution.
