Orminex Limited has announced the execution of a binding joint venture term sheet (JVTS) for the sale of 50% of the Penny’s Find Gold Mine to Black Mountain Gold Limited, a wholly owned subsidiary of Horizon Minerals Limited.
Following the acquisition of Penny’s Find in 2019 from Empire Resources, Orminex focused its efforts on securing the pre-requisite mining approvals ahead of the commencement of initial site works at the mine.
On 13 March 2020, Orminex announced that following a detailed review of the Penny’s Find mine plan, it was decided that further drilling would be undertaken to provide more confidence in the resource at depth and undertake confirmatory metallurgical test work.
In order to fast track the further development of Penny’s Find, the Company has agreed to enter into a binding JVTS with Black Mountain, under which it agreed to sell 50% of its right, title and interest in the Penny’s Find Gold Mine and associated miscellaneous and general purpose leases including all related mining information.
Under the agreement, Black Mountain will pay acquisition consideration of A$1.5 million in cash and will fund the advancement of Penny’s Find to the value of A$1 million, with Orminex free carried for the period until the sum of A$1 million has been spent by Black Mountain.
Orminex said that at the end of the free carry period, all further approved expenditure would be funded on a 50:50 basis, with Black Mountain to assume 50% of the company’s obligations in respect of royalties under its original acquisition agreement for Penny’s Find.
The agreement also grants exclusive right for Horizon to acquire the remaining 50% of the Penny’s Find Project at a price and on terms to be agreed towards the end of 2022, following completion of 230,000 tonnes of contracted toll milling.
The acquisition of the Penny’s Find Gold Mine, which is located 50km northeast of WA mining town Kalgoorlie, is expected to be completed before the end of the calendar year.