Alchemy Resources (ASX: ALY) has signed a binding agreement for the sale of its Karonie and Lake Rebecca projects in Western Australia to junior explorer Forrestania Resources (ASX: FRS).
Consideration for the deal has been agreed at $5 million and will be satisfied by the issue of Forrestania shares priced at the 10-day volume weighted average price of $0.6472.
Alchemy will retain a 1% net smelter royalty on all minerals extracted from the tenements, excluding the first 110,000 ounces from Karonie’s Parmelia, KZ5, and Taupo deposits.
The transaction will allow Alchemy and its shareholders to realise significant value from Karonie and Lake Rebecca and maintain a continuing interest via the royalty.
It will also strengthen the company’s financial position, enabling it to redirect capital and management focus to recent exploration success at the highly prospective Yellow Mountain and Overflow copper-gold projects in New South Wales.
Iron Ore and Lithium Exposure
Alchemy will retain significant value through the Valley Bore iron ore project via an option agreement with private mining company Newcam Minerals, providing a potential pathway to unlocking near-term value from the high-grade mineralisation.
The company’s lithium joint venture with Japan Organisation for Metals and Energy Security will provide it with technical and strategic support from one of the world’s leading government-backed resource agencies.
“A key focus of our strategy will be Yellow Mountain, which we believe has the potential to emerge as a flagship exploration asset,” chief executive officer James Wilson said, adding that the divestment highlighted a commitment to unlocking value across the company’s portfolio.
“Our planned exploration programs will also target the broader mineralised system across the regional landholding surrounding Yellow Mountain that we believe represents part of a larger district-scale opportunity.”
“Together, these assets position the company to capitalise on strong commodity themes while delivering a pipeline of catalysts as we progress our strategy through 2026,” Mr Wilson said.
Highly Prospective Structures
The Karonie and Lake Rebecca projects include 16 granted exploration licences covering 942 square kilometre of highly prospective mineralised structures within Kurnalpi Terrain greenstones east of Kalgoorlie.
Karonie is adjacent to the Aldiss Mining Centre owned by Vault Minerals (ASX: VAU), and covers 38km of the underexplored Claypan Shear Zone commencing just 12km along strike to the south of Ramelius Resources’ (ASX: RMS) Bombora deposit.
Alchemy announced a maiden inferred resource for the KZ5, Taupo, and Parmelia prospects of 2.96 million tonnes at 1.2 grams per tonne gold for 111,100 ounces In August 2021.
Lake Rebecca sits in the eastern goldfields region 100km northeast of Kalgoorlie in a geological setting covering greenstones, numerous internal granites, and known gold-bearing structures.
It is located 10km southeast of the Carosue Dam deposit owned by Northern Star Resources (ASX: NST), and 6km west of Ramelius’ Rebecca deposit.
