Regis Resources has acquired 35 gold tenements from Duketon Mining for $25 million, as it seeks to extend the life of its flagship Duketon operations.
Under the all-cash deal, Regis will pay $20 million cash up front, with balance to paid when 250,000 ounces of gold resource are measured at one of the tenements and once first production within at least one of the tenements begins.
Regis now controls 90 per cent of the gold rights in the Duketon Greenstone Belt, which is located near Laverton in the Goldfields.
Regis operates three gold mines within the Duketon project area, which produced 363,400 ounces of gold for the 2019 fiscal year.
The three mines are the Moolart Well, Garden Well and Rosemont mines.
Duketon will retain the rights to nickel over five of the tenements, which it believes are the most prospective areas for nickel.
Regis managing director Jim Beyer said the considerable expansion of the company’s landholding around its three mills provided an opportunity to invest further in exploration to expand the resource base and extend the mine life of the Duketon operations.
“Being able to accelerate greenfields exploration in an area which has previously been underexplored and is host to major shear zones and the extension of our existing orebodies is an immediate opportunity for the company,” he said.
Duketon managing director Stuart Fogarty said the deal would allow the company to focus its efforts on maximising value of its nickel resources.
“Realising the nickel potential of the region was the primary objective of the company at the initial public offering and has always remained a significant value driver for shareholders,” he said.
“This deal significantly reduces our ongoing tenement holding costs.”
Regis today also announced non-executive Paul Thomas would leave the board.
Shares in Regis were up 6.8 per cent to trade at $5.37 each at 2.30pm AEST.