Great Southern sells mining licence in $9 million WA gold belt deal
The deal sees Regis take full control of the mining licence hosting the Southern Star gold prospect, which is just 3.5 kilometres south of the company's operating 390,000 gold-ounce Ben Hur open pit.
Regis has forked out an upfront $4 million payment in cash, with up to $5 million more on the table, depending on future gold price movements and resource milestones.
It's not hard to see why. Drilling at Southern Star has previously returned some hefty hits, including 68 metres at 1.9 grams per tonne (g/t) gold from 61m and 59m at 2.1g/t gold from 53m, proving the prospect's potential to deliver near-surface ounces.
'This transaction is beneficial for both Great Southern Mining and Regis.'
Great Southern Mining managing director Matthew Keane
The transaction is structured across three stages - the $4 million upfront payment is just a starter. Stage two includes a further $3 million in cash pegged to gold price levels when mining begins, ranging from $1 million at a $4000 per ounce gold price to a full $3 million if the price stays above $5000 per ounce.
With the gold price currently trading at $5157 per ounce, Great Southern could well be in for the full payout.
Stage three unlocks an additional $2 million if Regis declares a JORC-compliant reserve greater than 150,000 ounces of gold at the Southern Star prospect.
Great Southern Mining managing director Matthew Keane said: 'This transaction is beneficial for both Great Southern Mining and Regis. It delivers a strong capital boost to fund aggressive exploration across GSN's highly prospective Duketon tenure, most of which remains underexplored. Meanwhile, Regis is perfectly positioned to leverage the near-term development upside from Southern Star. It's a deal that creates immediate value and sets the stage for new discoveries in the Duketon Belt.'
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