Catalyst Metals has agreed to divest the Henty Gold Mine in Tasmania, Australia to Kaiser Reef in a transaction valued at approximately A$47m ($29.5m).
The deal comprises upfront cash, deferred gold-linked payments, equity in Kaiser Reef, and a net smelter royalty, while also securing Catalyst metals an option over a Victorian processing plant.
Under the agreement, Catalyst Metals will receive A$15m in upfront cash, A$4m as reimbursement for environmental bonding payments, and A$14m in deferred gold consideration. This is equivalent to 3,000 ounces of future gold production.
The company will also gain A$14m in equity through a 19.99% stake in Kaiser Reef and a 0.5% net smelter royalty (NSR) on gold production from the Darwin Extension Target Zone. Additionally, Catalyst Metals has secured an option to acquire a 50% interest in the Maldon Processing Facility, located 100km from its Four Eagles gold project in Victoria.
The sale will allow Catalyst Metals to redeploy resources towards its flagship Plutonic Gold Belt in Western Australia, where it is undertaking an extensive exploration and development programme.
Catalyst Metals has stated that the transaction aligns with its long-term growth strategy. It provides immediate financial returns while retaining exposure to Henty’s future development and securing a processing solution for its Victorian assets.
Catalyst Metals managing director and CEO James Champion de Crespigny said: “Catalyst believes focus is important. 18 months ago, Catalyst committed itself to Western Australia by consolidating the Plutonic Gold Belt. Henty’s operating nature means the time required for it to realise value and upside of Henty was costly.
“This transaction allows Catalyst to focus on Western Australia while still sharing in the upside that can come from a new, more focused, operating team.”
The agreement also includes an option for Catalyst Metals to take control of the Maldon Processing Facility, a 200,000 tonnes per annum permitted processing plant.
The plant is currently operating at 30% capacity, allowing Catalyst Metals to secure a processing solution for its high-grade Four Eagles gold project without incurring immediate operational costs.
Should Catalyst Metals exercise the option, it would have the right to manage and expand the plant, funding any expansion through a loan to the joint venture.
The completion of the Henty sale is subject to several conditions, including approval from the Australian Securities Exchange (ASX), Kaiser Reef obtaining shareholder approval, and a minimum capital raise of A$20m by the firm.
