26/03/2019 - 12:42

Westgold to sell Higginsville for $50m

26/03/2019 - 12:42

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Perth-based Westgold Resources has agreed to sell its Higginsville gold operation to RNC Minerals, in a cash and scrip deal worth $50 million.

Westgold to sell Higginsville for $50m
RNC will pay for Higginsville half in cash and half in shares.

Perth-based Westgold Resources has agreed to sell its Higginsville gold operation to RNC Minerals, in a cash-and-scrip deal worth $50 million.

Under the deal, Canada-based RNC will pay Westgold $25 million in cash, including a non-refundable $4 million exclusivity deposit, and $25 million in shares for the operation located near Norseman.

In a statement, Westgold said RNC planned to consolidate Higginsville with its Beta Hunt gold operation in order to increase its output and decrease its operational costs.

Higginsville hosts a measured resource of 33 million tonnes at 1.97 grams per gold a tonne, for 487,000 ounces.

Westgold managing director Peter Cook said it was a sensible transaction that benefited both parties.

“The addition of the ‘bonanza grade’ gold discoveries and resource potential at Beta Hunt to the existing operation at Higginsville will provide enhanced gold output at lower costs, as well as security from ownership of substantial plant and infrastructure,” he said.

“Importantly the asset consolidation paints a bright picture for the future of the project and its employees.”

The proposed transaction is subject to approval from the Foreign Investment Review Board and the Toronto Stock Exchange.

Westgold is being advised by PCF Capital.

Earlier this month, Westgold pulled out of its proposed $15 million acquisition of Doray Minerals’ Gnaweeda and Andy Well gold projects after due diligence could not be satisfactorily completed.

The reasons why it could not be completed were not disclosed.

In December, it sold its Mt Marion and Buldania lithium royalties to SilverSteam SEZC for $15 million.

In April, Westgold sold its South Kalgoorlie operations to Northern Star Resources for $80 million.

Westgold is currently focusing on its gold assets in the Murchison region; the Murchison gold operation, the Fortnum project and the Cue gold operation.

Shares in Westgold were up 6.25 per cent to trade at $1.28 each at 2.53pm AEDT.

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