The Miles Kennedy-chaired Resource and Investment NL (RNI) has struck a deal to buy the Fortnum gold project and surrounding exploration tenements for $35 million in cash and shares.
RNI said Fortnum hosts a JORC-compliant resource of 1.2 million ounces at a grade of 2.2g/t and has more than 100 drilling targets based on an extensive exploration database compiled by previous owners.
This offers “outstanding exploration potential for both lode gold and VMS copper-gold deposits,” the company said.
As part of the acquisition, RNI will gain the 1 million tonne per annum Fortnum processing plant, which it plans to bring back into production within 12-18 months after recommissioning costs of $10.2 million.
RNI said the acquisition will significantly increase its footprint in the Bryah-Padbury Basin, north west of Meekatharra, from 434km2 currently to 2,225km2.
“This will make RNI a dominant tenement holder in the region with control of a 100km strike length of the highly prospective Narracoota Volcanics, host to the world-class DeGrussa copper-gold deposit currently being developed by Sandfire Resources,” the company said in a statement.
Fortnum was sold through a tender process conducted by Cayman Island hedge fund BlueCrest, which took ownership of the project after the former operator fell into receivership.
RNI will fund the cash component of the acquisition through an equity raising of about $30 million, to be managed and conditionally underwritten by Argonaut Capital.
In addition, New Holland Capital will arrange a debt facility of approximately $20 million to fund the re-commissioning of the gold treatment plant and to provide additional working capital.
RNI said its mining plan forecasts initial gold production of approximately 50,000oz per annum at a forecast cash cost of A$826/oz.
It also plans an extensive exploration program.
