Kalamazoo Resources has signed an agreement to sell its Snake Well gold project in Western Australia to Adaman Resources.
Pursuant to the agreement, Adaman will have rights over exploration licences 59/2137, 59/2239 and 59/2240 and mining leases 59/41, 59/474, 59/476, 59/477 and 59/565.
The company will pay the total consideration of A$7m ($4.92m) over 24 months.
Kalamazoo will retain a 2.5% net smelter royalty (NSR) on all base metals mined from the Snake Well tenements.
The company will use the sale proceeds to fund the exploration and drilling program at its Wattle Gully gold project in Victoria, Cork Tree copper project and the Pilbara gold tenements in WA.
The agreement also gives Kalamazoo the option to engage Adaman for the provision of up to A$4m ($2.81m) of drilling services for the Wattle Gully project. The amount provided will be deducted from the sale proceeds.
Kalamazoo purchased the Wattle Gully project and the surrounding 288km² Castlemaine Goldfield in June this year.
Kalamazoo Resources chairman Luke Reinehr said: “Signing the mining property sale and purchase agreement on time is an excellent result.
“The company is also delighted to have kept an interest in the base metal rights at Snake Well and the opportunity to establish an on-going relationship with Adaman.”
Located 450km north of Perth in the south Murchison Region, the Snake Well tenement holding covers a total area of 263km² and extends for a strike length of around 45km.
Adaman is a mining solutions company specialised in drilling, logistics and corporate services. In May this year, the firm acquired the Kirkalocka gold mine in WA’s Mid-West region.