Spartan Resources has agreed to divest its non-core Glenburgh and Egerton gold projects in Western Australia to Benz Mining in a deal valued at up to A$15.6m ($10.3m).
The latest binding agreement is expected to allow Spartan Resources to retain exposure in the projects’ future exploration prospects through a significant shareholding in Benz Mining.
The transaction includes an A$1m ($0.66m) cash payment to Spartan Resources, A$8.6m ($5.68m) in Benz CHESS Depository Instruments (CDIs), and up to an additional A$6m ($4m) in contingent payments.
Following the closing of the proposed deal, Spartan Resources will hold approximately 15% of Benz Mining shares, granting it the right to nominate a director to Benz Mining’s board, pending the fulfilment of specific conditions.
As a result of this transaction, Spartan Resources is anticipated to record a non-cash accounting impairment expense of around A$17m ($11.22m) against the carrying value of the Glenburgh and Egerton gold projects.
Located approximately 300km north of the Spartan Resources’ flagship Dalgaranga gold project, the Glenburgh and Egerton projects were expected to become a second production hub for the company.
The Egerton project hosts a current resource of 27,000 ounces of contained gold while for 510,100 ounces of gold are contained in 11 separate deposits in the Glenburgh project.
Spartan Resources interim executive chairman Simon Lawson said: “The Glenburgh and Egerton Projects have undoubtedly suffered from a lack of attention within the Spartan Group in recent years as a result of the incredible success we have enjoyed at Dalgaranga.
“As a result, they are considered non-core within our portfolio given our focus on continuing to rapidly add high-grade ounces and advancing Dalgaranga towards a production re-start decision.
“We are therefore pleased to have reached agreement with a funded and well-backed explorer in Benz Mining to give these assets a reinvigorated life.”
The transaction is expected to be completed in December 2024.
