Recent ASX debutant Auric Mining (ASX: AWJ) has expanded its holding by 1,800% in Western Australia’s goldfields after agreeing to acquire the gold rights of Neometals’ (ASX: NMT) Widgiemooltha tenement package.
According to Auric, the gold rights to Widgiemooltha increase its gold footprint in the region from 4.7 square kilometres to 91sq km.
The package is located 40km south of Kambalda and 90km north of Norseman in WA’s central goldfields.
All up, the Widgiemooltha package comprises 21 tenements. The package also surrounds Auric’s existing Munda gold project on three sides.
Auric said this “substantially” adds to the company’s prospective holding at the north end of the Widgiemooltha Dome.
“The Widgiemooltha tenements sit in a region historically recognised as nickel bearing where limited exploration for gold was mostly subordinated to nickel exploration,” Auric noted.
The company pointed out its recent drilling at Munda had increased the extent of known gold at the project. Drilling had also shown the potential for a gold discovery in the area.
Under the deal, Auric will pay a non-refundable $50,000 and has 45-days to undertake due diligence.
Further payments equating to $900,000 in cash ($200,000) and shares ($700,000) will be made to Neometals.
Once Auric has acquired the rights, it is obligated to spend $450,000 on exploration across the tenements within 12 months. An additional $450,000 is to be expended within 24 months, with Neometals to receive a 1% smelter royalty on any gold produced from the tenements.
Rationale behind acquisition
Auric’s rationale behind the acquisition is to provide the company with a “highly advantageous” opportunity to accelerate its plans of becoming a “significant gold company” by developing a new gold mining centre in the Widgiemooltha area.
“We are delighted by this strategic acquisition that rapidly accelerates our company’s growth strategy,” Auric managing director Mark English said.
“It was always our stated plan to increase our tenement footprint in the Widgiemooltha area.”
“This golds rights acquisition has achieved this for our shareholders, and we are well-funded to commence exploration on the prospective tenements within the package,” Mr English added.