AngloGold Ashanti Australia has signed an agreement granting it an option to acquire a majority stake in Matsa Resources’ Lake Carey gold project in Western Australia for a total cash consideration of A$101m ($63.52m).
Located near Laverton, the Lake Carey project includes three gold mines that are currently in care and maintenance, including the underground Red October gold mine and the open-pit Fortitude and Devon gold pits.
The Devon pit is subject to a profit-sharing joint venture with the neighbouring Linden Gold Alliance.
Under the agreement, Matsa will retain ownership of the Devon Pit gold mine, the Fortitude North project, and the Red October Accommodation Village, along with associated tenements.
The option can be exercised by AngloGold Ashanti within 18 months, subject to the satisfaction of certain conditions precedent.
The financial structure of the deal includes an option fee of A$8m ($5m), which will be paid in instalments.
The first instalment of A$500,000 ($314,435) has already been paid upon execution, while A$4.5m ($2.83m) will become due once all conditions precedent are met.
A further A$1.5m ($0.94m) will be paid six months after these conditions are fulfilled, followed by another A$1.5m ($0.94m) 12 months later.
If AngloGold Ashanti proceeds with the acquisition, an option exercise fee of approximately A$73m ($45.91m) will be payable.
Additionally, a deferred consideration of up to A$20m ($12.58m) may be paid based on the discovery of any JORC-compliant resources post-acquisition.
AngloGold Ashanti will also reimburse Matsa for tenement-related expenses incurred before the completion of the transaction.
The agreement is subject to conditions, including regulatory approvals. Matsa must secure the necessary approvals under the Corporations Act, ASX Listing Rules, and its constitution, including shareholder approval in accordance with ASX Listing Rule 11.2.
Proceeds from the transaction will be used to advance Matsa’s remaining assets, including the Devon Pit gold mine, exploration at Fortitude North, and corporate operations and working capital activities.
