M&A activity north of Kalgoorlie has kicked off once again with Gold Road Resources (ASX: GOR) farming into Iceni Gold’s (ASX: ICL) Guyer Gold Trend up to the tune of $44 million.
That’s because the tenure - within Iceni’s 14 Mile Well gold project – could host a gold-littered mineralised corridor begging to be dug up after Iceni recently stumbled across a gold anomaly that’s up to 950m wide and extending over 6km.
Guyer Well sits just 12km from South African major AngloGold Ashanti’s prolific Sunrise Dam mine, which churns out almost 600,000oz of gold each fiscal quarter.
Match made
Gold Road has been looking for a date to the prom for a while now, most recently failing as a takeover suitor of De Grey Mining (ASX: DEG) and its massive Hemi gold deposit AND unable to acquire a 40% stake in Canada’s Greenstone Gold Mines.
Poetically, the cash splash comes on the back of Northern Star Resources (ASX: NST) sealing a $5 billion acquisition of De Grey, of which it held a 17.3% stake.
The term sheet consists of a minimum $5 million spend at Guyer kicking off in January, with milestone markers to hit for management control.
An additional $10 million will be spent on exploration across the next 48 months if the mid-tier wants to realise a 50% stake across the >154km² project area.
The miner can earn another 20% to take the JV interest up to a 70:30 split if it proves up the resource towards a completed pre-feasibility study and a boost to 80:20 if it forks out an extra $20 million.
In addition to the farm-in, GOR is set to acquire a 9.9% interest in Iceni by subscribing for $3.05 million in shares at 10 cents - a tidy 59% premium to the 5-day VWAP prior to execution.
Latest ructions out of the company noted significant gold grades in bedrock during a 63-hole AC drill campaign, with the JV planning to drill down the targets next year.
Iceni itself is well on board with the move, with director Wade Johnson excited about the farm-in and reckons the project, within the Leonora gold district, could be an accretive move for the company and its shareholders.
“The commitment by Gold Road reaffirms our belief that the Guyer Gold Trend has the potential to host a significant gold deposit and reinforces the prospectivity of the entire tenement package,” Johnson says.
“The planned significant investment by GOR will also allow for the concurrent evaluation of multiple high prospectivity targets to be accelerated on the remainder of the Iceni ground.”