RNC Minerals announced that it has exercised the previously-announced purchase option to acquire the Higginsville Gold Operation (HGO) from Westgold Resources.
On closing, RNC will pay Westgold A$25 million in cash and A$21 million in RNC shares (satisfied by the issuance of 49.8 million RNC shares), for total consideration of A$50 million (including the A$4 million deposit previously satisfied in RNC shares). RNC expects to finance the cash component of the purchase price with cash on hand and additional non-dilutive capital. The acquisition is expected to close on or about June 10, 2019.
The acquisition of the Higginsville operations and its modern, low cost 1.3 Mtpa gold mill will provide a key piece of RNC’s strategy to unlock the significant potential of its Beta Hunt gold mine. The Higginsville mill will significantly reduce milling cost for Beta Hunt (RNC expects processing cost savings in excess of C$15 per tonne, a 35% reduction). HGO includes a 367,000 ounce reserve within a 1.2 million ounce measured & indicated gold resource, along with a further 0.7 million ounce inferred resource1, all located on a 386 square kilometer land position in the Kalgoorlie gold region. RNC successfully tolled Beta Hunt material through the HGO mill in 2018, achieving 94% gold recovery.
Mark Selby, President and CEO of RNC, commented “With the completion of our extensive due diligence process, we look forward to completing this transaction. The combination of the Higginsville Mill and our Beta Hunt Mine will transform RNC’s gold operations in Western Australia into a multi-mine operation anchored by the 1.3 Mtpa HGO Mill, the exciting high grade and resource potential at Beta Hunt, and a large land position in the Kalgoorlie gold region. Once the transaction closes, RNC will rapidly integrate Beta Hunt and HGO to begin unlocking this value for our shareholders.”
Source: Company Press Release