Great Boulder Resources (ASX: GBR) has signed a deal to acquire the historical high-grade Peak Hill gold project in Western Australia’s Murchison region from Aragon Resources, a subsidiary of Westgold (ASX: WGX).
The project hosts a mineral resource estimate of 9.4 million tonnes at 1.6 grams per tonne gold for 481,000 ounces contained gold across the Five Ways, Durack, Enigma, Harmony, and Jubilee deposits.
It has past recorded production of more than 900,000oz across four open-pit mines and seven granted mining leases.
While there has been no mining at Peak Hill since 1997, Great Boulder believes there is significant potential to increase the project’s known gold endowment through numerous near-mine and brownfields exploration opportunities.
The acquisition is expected to provide a material uplift in the company’s gold resource inventory and a pathway to capital-light gold production in the near-term.
Cash-Plus-Scrip Consideration
Consideration for the deal will comprise $25 million cash—of which $1 million has already been paid as a deposit—plus 391.7 million Great Boulder shares to give Westgold a total 19.9% equity.
Westgold will be granted a 1% net smelter royalty interest on the production of gold from the Peak Hill tenements and will have the right to nominate a non-executive director to the Great Boulder board.
Great Boulder has also entered into an ore purchase agreement (OPA) with Aragon and fellow Westgold subsidiary Big Bell Gold Operations to process ore at Westgold’s regional Bluebird, Fortnum, and Tuckabianna mills, focusing on a capital-light, near-term production model.
A non-binding strategic collaboration between Great Boulder and Westgold over the next 24 months will evaluate options that could fast-track Great Boulder’s 1Moz Side Well gold project located 25 kilometres from Bluebird.
The companies will work towards delivering more ounces sooner, given the proximity of Side Well to Westgold’s infrastructure, along with increasing net cashflows from operations and supporting Westgold’s expansion plans at the Bluebird site.
Multi-Rig Drilling Campaign
Great Boulder plans to complete a 60,000-metre multi-rig drilling campaign at Peak Hill and Side Well over the next six months, deliver an updated mineral resource estimate at Peak Hill, and move to “mining-ready” status under the OPA within 12 months.
The company will target Jubilee, Five Ways, Harmony, Enigma, Durack, Mt Pleasant, and the underground Treasure workings with infill work to validate previous drilling, confirm mineralised zones, and provide additional lithology and weathering information.
It also plans to drill diamond holes for structural orientations, bulk density sampling and potential metallurgical samples, as well as conduct step-out drilling to test extensional opportunities along strike and at depth.
Reverse circulation drilling by Westgold in 2025 returned several standout intersections demonstrating highly-prospective brownfields potential outside the current resource estimates, with highlights from the Treasure area of 19m at 13.34g/t gold from 104m including 7m at 34.57g/t from 107m, and 10m at 18.79g/t gold from 19m including 1m at 114.25g/t from 23m.
In preparation for pre-production activities, Great Boulder has appointed former MACA managing director Chris Tuckwell to its board of directors.
Capital-Light Production
Great Boulder managing director Andrew Paterson said the acquisition of Peak Hill would be “hugely transformational” for the company.
“Not only does it add a significant gold endowment to our Side Well project, but with the ore purchase agreement and support of leading producer Westgold, it places us on a pathway to capital-light production,” he said.
“The next six to 12 months will be milestone-rich as we execute aggressive drilling campaigns with up to six rigs across Peak Hill and Side Well, and progress pre-production activities.”
Westgold managing director Wayne Bramwell added that the company had “high regard for its Murchison goldfields neighbour” and its commitment to becoming a miner.
“[We] continue to support smaller companies in their journey to being producers across WA and we look forward to assisting Great Boulder with a capital-light opportunity that leverages our extensive Murchison processing infrastructure,” he said.
Concurrent to the acquisition, Great Boulder will seek to raise $40 million via a two-tranche placement to domestic and global institutional investors of 470.6 million new shares priced at $0.085 each.
This represents a 3.4% discount to the last traded price of $0.088 per share and a 13.6% discount to the 10-day volume weighted average price of $0.098.
